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The drivers of energy-related financial hardship in Australia – understanding the role of income, consumption and housing

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  • Nelson, Tim
  • McCracken-Hewson, Eleanor
  • Sundstrom, Gabby
  • Hawthorne, Marianne

Abstract

Saunders and Bedford (2017) demonstrated that income levels are inadequate for some Australian households to maintain a basic standard of living. Analysing utility bills can extend this consideration of income adequacy issues given the essential nature of services such as electricity, telephony and water. This article builds on the work presented by Simshauser and Nelson (2014) about key demographic cohorts in Australia that have a high incidence of energy-related financial hardship. Our analysis indicates that energy related financial hardship is likely to be related to a combination of the following: family formation demographics; low-income (often reliant upon government income support); higher household size; and higher than average consumption. Our policy recommendations are relatively straightforward: development of tools to allow easier ‘shopping around’ by energy customers; cessation of credit-checking by energy retailers as a means of restricting access to energy offers; reform of state-based concessions frameworks; a lifting of income support for some key cohorts (e.g. unemployed); improvements to energy-efficiency standards; and amendments to tenancy laws to overcome potential principal-agent issues associated with uptake of new energy products and services such as embedded solar PV and battery storage.

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  • Nelson, Tim & McCracken-Hewson, Eleanor & Sundstrom, Gabby & Hawthorne, Marianne, 2019. "The drivers of energy-related financial hardship in Australia – understanding the role of income, consumption and housing," Energy Policy, Elsevier, vol. 124(C), pages 262-271.
  • Handle: RePEc:eee:enepol:v:124:y:2019:i:c:p:262-271
    DOI: 10.1016/j.enpol.2018.10.003
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    3. Zhe, Lv & Jie, Wu & Yuan, He, 2023. "The effect of place attachment of geographical indication agricultural products on repurchase intention," Journal of Retailing and Consumer Services, Elsevier, vol. 72(C).
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    6. Sangeetha Chandrashekeran & Viktoria Noka & Stefan Bouzarovski, 2022. "Energy Poverty: Measurement and Governance in Europe and Lessons for Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 55(4), pages 491-502, December.
    7. Robert Gajda & Marzena Jeżewska-Zychowicz, 2021. "The importance of social financial support in reducing food insecurity among elderly people," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(3), pages 717-727, June.
    8. Wim Van Opstal & Anse Smeets, 2022. "Market-Specific Barriers and Enablers for Organizational Investments in Solar PV—Lessons from Flanders," Sustainability, MDPI, vol. 14(20), pages 1-26, October.
    9. Ozarisoy, B. & Altan, H., 2022. "Significance of occupancy patterns and habitual household adaptive behaviour on home-energy performance of post-war social-housing estate in the South-eastern Mediterranean climate: Energy policy desi," Energy, Elsevier, vol. 244(PB).
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    More about this item

    Keywords

    D04; D47; Q40; Q41; Q48; Energy; Inequality; Income adequacy;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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