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Housing, Energy Cost, and the Poor: Counteracting Effects in Germany's Housing Allowance Program

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  • Peter Grösche

Abstract

Adequate housing and affordable warmth are essential human needs, the lack of which may seriously harm people's health. Germany provides an allowance to low-income households, covering the housing as well as the space heating cost, to protect people from the consequences of poor housing conditions and fuel poverty. In order to limit public expenditures, payment recipients are required to choose low-cost dwellings, with the consequence that they probably occupy flats with a poor thermal performance. Recipients are thus likely to have a higher energy consumption and energy expenditures. Using a large data set of German households, this paper demonstrates that this counteracting effect is of negligible magnitude. Yet, from an ecological perspective, the allowance scheme creates distorted incentives and should be reformed.

Suggested Citation

  • Peter Grösche, 2009. "Housing, Energy Cost, and the Poor: Counteracting Effects in Germany's Housing Allowance Program," SOEPpapers on Multidisciplinary Panel Data Research 202, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp202
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    References listed on IDEAS

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    1. Peter Grösche, 2009. "Measuring residential energy efficiency improvements with DEA," Journal of Productivity Analysis, Springer, vol. 31(2), pages 87-94, April.
    2. Ira S. Lowry, 1960. "Filtering and Housing Standards: A Conceptual Analysis," Land Economics, University of Wisconsin Press, vol. 36(4), pages 362-370.
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    2. Vilches, Alberto & Barrios Padura, Ángela & Molina Huelva, Marta, 2017. "Retrofitting of homes for people in fuel poverty: Approach based on household thermal comfort," Energy Policy, Elsevier, vol. 100(C), pages 283-291.
    3. Schaffrin, André & Reibling, Nadine, 2015. "Household energy and climate mitigation policies: Investigating energy practices in the housing sector," Energy Policy, Elsevier, vol. 77(C), pages 1-10.
    4. Keyu Chen & Chao Feng, 2022. "Linking Housing Conditions and Energy Poverty: From a Perspective of Household Energy Self-Restriction," IJERPH, MDPI, vol. 19(14), pages 1-17, July.
    5. Schleich, Joachim & Faure, Corinne & Meissner, Thomas, 2021. "Adoption of retrofit measures among homeowners in EU countries: The effects of access to capital and debt aversion," Energy Policy, Elsevier, vol. 149(C).
    6. Schleich, Joachim, 2019. "Energy efficient technology adoption in low-income households in the European Union – What is the evidence?," Energy Policy, Elsevier, vol. 125(C), pages 196-206.
    7. Tovar Reaños, Miguel A. & Wölfing, Nikolas M., 2018. "Household energy prices and inequality: Evidence from German microdata based on the EASI demand system," Energy Economics, Elsevier, vol. 70(C), pages 84-97.
    8. Haokun Li & Guoqiang Xu & Jiuwang Chen & Junfang Duan, 2022. "Investigating the Adaptive Thermal Comfort of the Elderly in Rural Mutual Aid Homes in Central Inner Mongolia," Sustainability, MDPI, vol. 14(11), pages 1-21, June.

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    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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