Unveiling the energy price tag - Assessing the burden of household energy expenditures among European countries

The equity dimension of climate and energy policy is increasingly emphasised both in the academic literature as well as by policymakers. We contribute to the growing body of research that scrutinizes these aspects by quantitatively assessing the patterns of in-come shares of energy expenditures using household survey data from European Union countries for the years 2010, 2015 and 2020. We employ established indices from the public finance literature to quantify the variation in energy expenditure shares along the income distribution. Furthermore, our analysis highlights that an assessment of the equity implications of policies needs a more nuanced approach than just considering energy poverty measures, since these policies affect households along the income distribution. Additionally, we investigate the role of various socio-demographic factors in shaping energy expenditure inequality by a decomposition analysis. In contrast to income, that leads to a higher concentration of energy expenditures, certain characteristics-such as household size and socio-economic status—contribute to a more equal distribution of energy expenditures in the population. Thus, a more differentiated and fine-tuned policy mix beyond purely income-based transfers may be required.