Examining the impact of structural reforms on energy poverty: A threshold effect of energy affordability

Energy poverty remains a major issue in developing countries, drawing significant concern. This study investigates how structural reforms have impacted energy poverty in these nations from 2000 to 2021, with a particular focus on the role of energy affordability in this dynamic. The study aims to identify a nonlinear relationship between these factors by conducting a threshold analysis, which traditional studies often overlook. This approach provides more accurate insights and predictions by recongnizing how dynamics change beyond specific limits. The research highlights two key factors: energy affordability, which serves as a crucial threshold variable, and structural reforms, which drive change. The study finds that when energy becomes affordable beyond a certain point, energy poverty begins to decrease, underscoring the importance of affordability in addressing this issue. Furthermore, structural reforms have been found to enhance energy affordability by attracting investments, fostering innovation, and improving infrastructure. Overall, structural reforms play a pivotal role in reducing energy poverty across developing nations. However, the study also uncovers notable variations in how different countries experience the interplay between structural reforms and energy affordability. Based on these findings, the study recommends that policymakers prioritize fostering environments conducive to reforms that effectively address energy poverty. These efforts are critical to achieving sustainable development and improving the lives of millions worldwide.