IDEAS home Printed from https://ideas.repec.org/a/eee/jpolmo/v47y2025i2p251-275.html

Energy price increases and mitigation policies: Redistributive effects on Italian households

Author

Listed:
  • Bonfatti, Andrea
  • Giarda, Elena

Abstract

Between July 2021 and March 2023, the Italian government took action to support households’ and individuals’ incomes to help them cope with the exceptional energy and food prices surge, by means of both tariff and income-based fiscal policy measures. In this paper, we perform a microsimulation exercise to quantify the effects of the price increases and of the policy interventions on household expenditure and income. Our results indicate that the regressive impact of the price rises was mitigated by the fiscal measures, which also succeeded in reducing inequality, at risk of poverty and energy poverty. Furthermore, we observe the relevant role of income-based measures in the South of the country.

Suggested Citation

  • Bonfatti, Andrea & Giarda, Elena, 2025. "Energy price increases and mitigation policies: Redistributive effects on Italian households," Journal of Policy Modeling, Elsevier, vol. 47(2), pages 251-275.
    • Handle: RePEc:eee:jpolmo:v:47:y:2025:i:2:p:251-275
    DOI: 10.1016/j.jpolmod.2024.06.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0161893824001017
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jpolmod.2024.06.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or

    for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Faiella, Ivan & Lavecchia, Luciano & Michelangeli, Valentina & Mistretta, Alessandro, 2022. "A climate stress test on the financial vulnerability of Italian households and firms," Journal of Policy Modeling, Elsevier, vol. 44(2), pages 396-417.
    2. Massimo Baldini & Elizabeth J. Casabianca & Elena Giarda & Lorenzo Lusignoli, 2018. "The impact of REI on Italian households’ income: A micro and macro evaluation," Department of Economics 0126, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    3. Gürer Eren & Weichenrieder Alfons, 2020. "Pro-rich inflation in Europe: Implications for the measurement of inequality," German Economic Review, De Gruyter, vol. 21(1), pages 107-138, April.
    4. Charalambakis, Evangelos & Fagandini, Bruno & Henkel, Lukas & Osbat, Chiara, 2022. "The impact of the recent rise in inflation on low-income households," Economic Bulletin Boxes, European Central Bank, vol. 7.
    5. Massimo Baldini & Elizabeth Jane Casabianca & Elena Giarda & Lorenzo Lusignoli, 2018. "The Impact of REI on Italian Households' Income: A Micro and Macro Evaluation," Politica economica, Società editrice il Mulino, issue 2, pages 103-134.
    6. Elena Giarda & Gloria Moroni, 2018. "The Degree of Poverty Persistence and the Role of Regional Disparities in Italy in Comparison with France, Spain and the UK," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 136(1), pages 163-202, February.
    7. von Arnim, Rudiger & Tröster, Bernhard & Staritz, Cornelia & Raza, Werner, 2018. "Commodity price shocks and the distribution of income in commodity-dependent least-developed countries," Journal of Policy Modeling, Elsevier, vol. 40(2), pages 434-451.
    8. Ackley, Gardner, 1978. "The Costs of Inflation," American Economic Review, American Economic Association, vol. 68(2), pages 149-154, May.
    9. Doris Prammer & Lukas Reiss, 2023. "Fighting (the effects of) inflation: government measures in Austria and the EU," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q4/22-Q1/, pages 95-106.
    10. Bardazzi, Rossella & Gastaldi, Francesca & Iafrate, Francesca & Pansini, Rosaria Vega & Pazienza, Maria Grazia & Pollastri, Corrado, 2024. "Inflation and distributional impacts: Have mitigation policies been successful for vulnerable and energy poor households?," Energy Policy, Elsevier, vol. 188(C).
    11. Nicola Curci & Marco Savegnago & Giordano Zevi & Roberta Zizza, 2025. "The redistributive effects of inflation: a microsimulation analysis for Italy," International Journal of Microsimulation, International Microsimulation Association, vol. 18(3), pages 87-100.
    12. Ivan Faiella & Luciano Lavecchia, 2021. "Households' energy demand and the effects of carbon pricing in Italy," Questioni di Economia e Finanza (Occasional Papers) 614, Bank of Italy, Economic Research and International Relations Area.
    13. Malliaris, Anastasios G. & Malliaris, Mary E., 2023. "Where is the Euro Area headed? Restoration of price stability," Journal of Policy Modeling, Elsevier, vol. 45(4), pages 848-863.
    14. John Hills, 2012. "Getting the measure of fuel poverty: Executive summary," CASE Briefs 31, Centre for Analysis of Social Exclusion, LSE.
    15. Bettarelli, Luca & Estefania-Flores, Julia & Furceri, Davide & Loungani, Prakash & Pizzuto, Pietro, 2023. "Energy inflation and consumption inequality," Energy Economics, Elsevier, vol. 124(C).
    16. AMORES Antonio F. & BASSO Henrique & BISCHL Simeon & DE AGOSTINI Paola & DE POLI Silvia & DICARLO Emmanuele & FLEVOTOMOU Maria & FREIER Max & MAIER Sofia & GARCÍA-MIRALLES Esteban & PIDKUYKO Myroslav , 2023. "Inflation, Fiscal Policy and Inequality," JRC Working Papers on Taxation & Structural Reforms 2023-10, Joint Research Centre.
      • Basso, Henrique S. & Flevotomou, Maria & Freier, Maximilian & Pidkuyko, Myroslav & Amores, Antonio F. & Bischl, Simeon & De Agostini, Paola & De Poli, Silvia & Dicarlo, Emanuele & Maier, Sofia & Garcí, 2023. "Inflation, fiscal policy and inequality," Occasional Paper Series 330, European Central Bank.
      • Sara Riscado & Antonio F. Amores & Henrique Basso & Johannes Simeon Bischl & Paola De Agostini & Silvia De Poli & Emanuele Dicarlo & Maria Flevotomou & Maximilian Freier & Sofia Maier & Esteban Garcia, 2024. "Inflation, fiscal policy and inequality," Working Papers w202424, Banco de Portugal, Economics and Research Department.
    17. Laura Barbieri & Chiara Mussida, 2018. "Structural differences across macroregions: an empirical investigation," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(2), pages 215-246, May.
    18. Hills, John, 2011. "Fuel poverty: the problem and its measurement," LSE Research Online Documents on Economics 39270, London School of Economics and Political Science, LSE Library.
    19. Andrea Colabella & Luciano Lavecchia & Valentina Michelangeli & Raffaella Pico, 2023. "To eat or to heat: are energy bills squeezing people's spending?," Questioni di Economia e Finanza (Occasional Papers) 800, Bank of Italy, Economic Research and International Relations Area.
    20. Francesco Corsello & Marianna Riggi, 2023. "Inflation is not equal for all: the heterogenous effects of energy shocks," Temi di discussione (Economic working papers) 1429, Bank of Italy, Economic Research and International Relations Area.
    21. Fanti, Lucrezia & Pereira, Marcelo C. & Virgillito, Maria Enrica, 2023. "The North-South divide: Sources of divergence, policies for convergence," Journal of Policy Modeling, Elsevier, vol. 45(2), pages 405-429.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ricciutelli, Francesco, 2024. "Energy Inflation and Consumption Inequality," MPRA Paper 120899, University Library of Munich, Germany.
    2. Coccia, Samantha & Russo, Alberto, 2025. "Inflation, inequality and financial vulnerability: Monetary vs. fiscal policy in the face of an energy shock," Energy Economics, Elsevier, vol. 143(C).
    3. Dorothée Charlier & Sondès Kahouli, 2019. "From Residential Energy Demand to Fuel Poverty: Income-induced Non-linearities in the Reactions of Households to Energy Price Fluctuations," The Energy Journal, , vol. 40(2), pages 101-138, March.
    4. Charlier, Dorothée, 2015. "Energy efficiency investments in the context of split incentives among French households," Energy Policy, Elsevier, vol. 87(C), pages 465-479.
    5. Kahouli, Sondès & Okushima, Shinichiro, 2021. "Regional energy poverty reevaluated: A direct measurement approach applied to France and Japan," Energy Economics, Elsevier, vol. 102(C).
    6. Ang'u, Cohen & Muthama, Nzioka John & Mutuku, Mwanthi Alexander & M’IKiugu, Mutembei Henry, 2023. "Analysis of energy poverty in Kenya and its implications for human health," Energy Policy, Elsevier, vol. 176(C).
    7. Okushima, Shinichiro, 2016. "Measuring energy poverty in Japan, 2004–2013," Energy Policy, Elsevier, vol. 98(C), pages 557-564.
    8. Ugo Colombino & Nizamul Islam, 2018. "Basic Income and Flat Tax: The Italian Scenario," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 19(03), pages 20-29, October.
    9. Giovanni Gallo & Michele Raitano, 2020. "SOS incomes: Simulated effects of COVID-19 and emergency benefits on individual and household income distribution in Italy," Working Papers 566, ECINEQ, Society for the Study of Economic Inequality.
    10. Piotr Lewandowski & Katarzyna Salach, 2018. "Pomiar ubostwa energetycznego na podstawie danych BBGD - metodologia i zastosowanie," IBS Research Reports 01/2018, Instytut Badan Strukturalnych.
    11. Stefano Boscolo & Giovanni Gallo, 2024. "The Struggle of Being Poor and Claimant: Evidence on the Non-Take-Up of Social Policies in Italy," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 10(2), pages 625-648, July.
    12. Stefano Boscolo, 2022. "The contribution of tax-benefit instruments to income redistribution in Italy," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2022(2), pages 181-231.
    13. Filippo Pallotti & Gonzalo Paz-Pardo & Jiri Slacalek & Oreste Tristani & Giovanni L. Violante, 2024. "Who Bears the Costs of Inflation? Euro Area Households and the 2021–2023 Shock," NBER Chapters, in: Inflation in the COVID Era and Beyond, National Bureau of Economic Research, Inc.
    14. Burlinson, Andrew & Giulietti, Monica & Battisti, Giuliana, 2018. "The elephant in the energy room: Establishing the nexus between housing poverty and fuel poverty," Energy Economics, Elsevier, vol. 72(C), pages 135-144.
    15. Mattioli, Giulio & Lucas, Karen & Marsden, Greg, 2018. "Reprint of Transport poverty and fuel poverty in the UK: From analogy to comparison," Transport Policy, Elsevier, vol. 65(C), pages 114-125.
    16. Llorca, Manuel & Rodriguez-Alvarez, Ana & Jamasb, Tooraj, 2020. "Objective vs. subjective fuel poverty and self-assessed health," Energy Economics, Elsevier, vol. 87(C).
    17. O'Donoghue, Cathal & Can, Zeynep Gizem & Montes-Viñas, Ana & Sologon, Denisa M., 2025. "Macro-Economic Change and Household Financial Strain in Europe 2006-2022," IZA Discussion Papers 17739, Institute of Labor Economics (IZA).
    18. Heindl, Peter & Löschel, Andreas, 2015. "Social implications of green growth policies from the perspective of energy sector reform and its impact on households," CAWM Discussion Papers 81, University of Münster, Münster Center for Economic Policy (MEP).
    19. Massimo Baldini & Giulia Mancini & Giovanni Vecchi, 2018. "No country for young people. Poverty and Age in Italy, 1948-2018," Department of Economics 0128, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    20. Lanterna, Federica, 2024. "Trying to find a balance: Energy excise duties in the context of climate targets, energy shocks, and redistributive goals," Energy Policy, Elsevier, vol. 195(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D30 - Microeconomics - - Distribution - - - General
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jpolmo:v:47:y:2025:i:2:p:251-275. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505735 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.