Decomposing energy poverty in three components

ABSTRACT

In this paper, we decompose a family of energy poverty indices into incidence, intensity and inequality among the poor. When continuous variables such as income are used, it is well known that any income poverty index should take into account these three poverty terms. Therefore, every energy poverty measure should also take into account these three. We propose to follow an analogous idea to decompose a family of energy poverty indices in these three components. The novelty of this proposal is that the multidimensional family of energy poverty measures is applied to multiple dichotomous variables and not to a single continuous variable, when, to date, no decomposition has been proposed based on these types of variables. We then extend this decomposition to a further decomposition by population subgroups. In this way, we will be able to know more precisely the origins of energy poverty in order to implement more specific anti-poverty policies targeting the incidence, intensity or/and inequality among the energy poor. Finally, we apply the proposed decomposition to Spain in 2020 as regards certain individual and household characteristics, so as to identify the individuals most likely to suffer from energy poverty in the first year of the Covid-19 pandemic. © 2022