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Does Income Affect Climbing the Energy Ladder? A New Utility-Based Approach for Measuring Energy Poverty

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  • Luan Thanh Nguyen
  • Shyama Ratnasiri
  • Liam Wagner

Abstract

Energy poverty measures are gradually becoming less relevant for fast-developing countries, where the energy mix consists of traditional and modern energies. We propose a new approach for measuring energy poverty by modifying the Exact Affine Stone Index (EASI) demand system to include implied disutility of energy use. The disutility arises from the effects of price or income changes and the use of polluting energies. Using data from Vietnam, we found that energy poverty could happen at higher income levels than the level considered in the literature, and higher incomes may not encourage households to climb the energy ladder. However, consuming carbon-intensive fuel does not necessarily mean energy poor.

Suggested Citation

  • Luan Thanh Nguyen & Shyama Ratnasiri & Liam Wagner, 2023. "Does Income Affect Climbing the Energy Ladder? A New Utility-Based Approach for Measuring Energy Poverty," The Energy Journal, , vol. 44(4), pages 123-146, July.
    • Handle: RePEc:sae:enejou:v:44:y:2023:i:4:p:123-146
    DOI: 10.5547/01956574.44.4.lngu
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    1. Dorothee Charlier and Berangere Legendre, 2019. "A Multidimensional Approach to Measuring Fuel Poverty," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    2. Fatih Birol, 2007. "Energy Economics: A Place for Energy Poverty in the Agenda?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-6.
    3. Zhao, Jun & Jiang, Qingzhe & Dong, Xiucheng & Dong, Kangyin, 2021. "Assessing energy poverty and its effect on CO2 emissions: The case of China," Energy Economics, Elsevier, vol. 97(C).
    4. Dong, Kangyin & Ren, Xiaohang & Zhao, Jun, 2021. "How does low-carbon energy transition alleviate energy poverty in China? A nonparametric panel causality analysis," Energy Economics, Elsevier, vol. 103(C).
    5. Dong, Kangyin & Taghizadeh-Hesary, Farhad & Zhao, Jun, 2022. "How inclusive financial development eradicates energy poverty in China? The role of technological innovation," Energy Economics, Elsevier, vol. 109(C).
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    Cited by:

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    2. Arkadiusz Piwowar, 2022. "Energy Poverty as a Current Problem in the Light of Economic and Social Challenges," Energies, MDPI, vol. 15(22), pages 1-9, November.
    3. Clement Oteng & Omowumi Iledare & James Atta Peprah & Pius Gamette, 2024. "Towards Just Energy Transition: Renewable Energy Transition Dynamics and Sectorial Employment in Ghana," Sustainability, MDPI, vol. 16(9), pages 1-18, April.

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    More about this item

    Keywords

    Energy poverty; Fuel poverty; Household energy use; EASI demand system; Vietnam; Household living standards survey;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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