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Energy Affordability and Subjective Well-Being: Evidence for European Countries

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  • Heinz Welsch
  • Philipp Biermann

Abstract

This paper uses data on the life satisfaction of more than 100,000 individuals in 21 European countries from 2002 to 2011, to study the relationship between subjective well-being and the affordability for households of electricity, heating oil and natural gas. We find that energy prices have statistically and economically significant effects on subjective well-being. The effect sizes are smaller than but comparable to the effects of important personal factors of well-being. Effects above average are found in individuals from the lowest income quartile. In addition, effects are strongest at times when required energy expenditures can be expected to be high. The empirical results are consistent with the prediction that greater fuel poverty implies a greater effect of energy prices on well-being.

Suggested Citation

  • Heinz Welsch & Philipp Biermann, 2017. "Energy Affordability and Subjective Well-Being: Evidence for European Countries," The Energy Journal, , vol. 38(3), pages 159-176, May.
    • Handle: RePEc:sae:enejou:v:38:y:2017:i:3:p:159-176
    DOI: 10.5547/01956574.38.3.hwel
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    References listed on IDEAS

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    1. Levinson, Arik, 2012. "Valuing public goods using happiness data: The case of air quality," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 869-880.
    2. Welsch, Heinz & Biermann, Philipp, 2016. "Measuring nuclear power plant externalities using life satisfaction data: A spatial analysis for Switzerland," Ecological Economics, Elsevier, vol. 126(C), pages 98-111.
    3. Bruno S. Frey & Alois Stutzer, 2002. "What Can Economists Learn from Happiness Research?," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 402-435, June.
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    5. Peter Heindl, 2015. "Measuring Fuel Poverty: General Considerations and Application to German Household Data," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 71(2), pages 178-215, June.
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    Citations

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    Cited by:

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    2. Li Liu & Jichuan Sheng, 2025. "Green Growth’s Unintended Burden: The Distributional and Well-Being Impacts of China’s Energy Transition," Energies, MDPI, vol. 18(20), pages 1-18, October.
    3. Paul Simshauser, 2022. "The 2022 energy crisis: horizontal and vertical impacts of policy interventions in Australia's national electricity market," Working Papers EPRG2216, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    4. Huang, Qiu & Lin, Silu & Guo, Yizhuo, 2024. "Can energy transition improve the quality of life for the population?–Empirical analysis of 30 provinces in China," Energy, Elsevier, vol. 313(C).
    5. Yuxiang Ye & Steven F Koch & Jiangfeng Zhang, "undated". "Modelling required energy consumption with equivalence scales," ERSA Working Paper Series v::y:2020:i::id:123, Economic Research Southern Africa.
    6. Bettarelli, Luca & Furceri, Davide & Pizzuto, Pietro & Shakoor, Nadia, 2024. "Climate change policies and income inequality," Energy Policy, Elsevier, vol. 191(C).
    7. Bright Akwasi Gyamfi & Tomiwa Sunday Adebayo & Divine Q. Agozie & Festus Victor Bekun & Ayben Koy, 2025. "Is sustainable energy consumption, technological advancement and urbanization fast addressing south Asia’s green energy expansion deficits?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(8), pages 19969-19998, August.
    8. Davillas, Apostolos & Burlinson, Andrew & Liu, Hui-Hsuan, 2022. "Getting warmer: Fuel poverty, objective and subjective health and well-being," Energy Economics, Elsevier, vol. 106(C).
    9. Llorca, Manuel & Rodriguez-Alvarez, Ana, 2026. "Is Spain's energy voucher lighting the way for the poor? A microeconomic evaluation of the Bono Social Eléctrico," Energy Economics, Elsevier, vol. 158(C).
    10. María del Carmen Pérez-Peña & José Ruiz-Chico & Mercedes Jiménez-García & Antonio Rafael Peña-Sánchez, 2026. "The Economic Impact of Perceived Energy Poverty: A Population-level Analysis and its Relationship with the SDGs," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 17(2), pages 5541-5569, April.
    11. Wang, Yao & Du, Zhili, 2024. "Has energy poverty entangled the households by hindering the filial generation?," Energy Policy, Elsevier, vol. 186(C).

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