Temperature shocks and multidimensional energy poverty: Evidence from Malawi

This paper contributes to the emerging literature on the relationship between temperature shocks and household energy poverty by providing the first empirical evidence of this link in a low-income country. Using four waves of Malawi’s Integrated Household Panel Survey data from the World Bank Microdata Library, matched with weather data from the European Centre for Medium-Range Weather Forecasts, this paper employs a binning approach to capture temperature shocks and measures energy poverty multidimensionally. The results from a fixed effects panel model, robust to several sensitivity checks, indicate that temperature shocks have a positive and statistically significant impact on energy poverty. Specifically, each additional day of extreme temperatures (≥31°C) increases the probability of household energy poverty by 0.9 percentage points. The paper also explores the mediating role of household health and income, and finds that household health is a key channel through which temperature shocks influence energy poverty.