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Energy Affordability and Subjective Well-Being: Evidence for European Countries

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  • Heinz Welsch
  • Philipp Biermann

Abstract

This paper uses data on the life satisfaction of more than 100,000 individuals in 21 European countries from 2002 to 2011, to study the relationship between subjective well-being and the affordability for households of electricity, heating oil and natural gas. We find that energy prices have statistically and economically significant effects on subjective well-being. The effect sizes are smaller than but comparable to the effects of important personal factors of well-being. Effects above average are found in individuals from the lowest income quartile. In addition, effects are strongest at times when required energy expenditures can be expected to be high. The empirical results are consistent with the prediction that greater fuel poverty implies a greater effect of energy prices on well-being.

Suggested Citation

  • Heinz Welsch & Philipp Biermann, 2017. "Energy Affordability and Subjective Well-Being: Evidence for European Countries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
  • Handle: RePEc:aen:journl:ej38-3-welsch
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    Cited by:

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    3. Yuxiang Ye & Steven F. Koch & Jiangfeng Zhang, 2020. "Modelling Required Energy Consumption with Equivalence Scales," Working Papers 202014, University of Pretoria, Department of Economics.
    4. Elena Druică & Zizi Goschin & Rodica Ianole-Călin, 2019. "Energy Poverty and Life Satisfaction: Structural Mechanisms and Their Implications," Energies, MDPI, Open Access Journal, vol. 12(20), pages 1-20, October.
    5. Rodriguez-Alvarez, Ana & Orea, Luis & Jamasb, Tooraj, 2019. "Fuel poverty and Well-Being:A consumer theory and stochastic frontier approach," Energy Policy, Elsevier, vol. 131(C), pages 22-32.
    6. Awaworyi Churchill, Sefa & Smyth, Russell & Farrell, Lisa, 2020. "Fuel poverty and subjective wellbeing," Energy Economics, Elsevier, vol. 86(C).
    7. Prakash, Kushneel & Awaworyi Churchill, Sefa & Smyth, Russell, 2020. "Petrol prices and subjective wellbeing," Energy Economics, Elsevier, vol. 90(C).

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