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Can inclusive finance alleviate household energy poverty? Fresh evidence from survey data in China

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  • Pan, Rongkai
  • Tian, Zhihua
  • Zhu, Xunuan
  • Tian, Yanfang

Abstract

This paper uses Chinese household survey data to investigate the impact of inclusive finance on household energy poverty (HEP). We establish a multidimensional index of inclusive finance, covering accessibility, usability, and health of financial products and services, and an index of HEP, balancing energy affordability and accessibility. The results suggest a beneficial impact of inclusive finance in alleviating HEP, and this finding remains robust after controlling for endogeneity issues using an instrumental variables approach. Human capital accumulation and income are potential mechanisms for financial inclusion to mitigate HEP. We also find that the effect of inclusive finance on reducing HEP diminishes as income increases, with the effect only significant for low-income households. Our findings provide empirical evidence to support inclusive financial development, household energy transition, and poverty reduction in emerging economies.

Suggested Citation

  • Pan, Rongkai & Tian, Zhihua & Zhu, Xunuan & Tian, Yanfang, 2025. "Can inclusive finance alleviate household energy poverty? Fresh evidence from survey data in China," Energy, Elsevier, vol. 316(C).
    • Handle: RePEc:eee:energy:v:316:y:2025:i:c:s0360544225001677
    DOI: 10.1016/j.energy.2025.134525
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