IDEAS home Printed from https://ideas.repec.org/p/fip/fedgfe/2025-26.html
   My bibliography  Save this paper

Energy Consumption and Inequality in the U.S.: Who are the Energy Burdened?

Author

Abstract

Using a broad definition of energy consumption that includes both residential energy use and gasoline for transport, we identify 20% of households in the PSID as energy burdened (EB) based on a twice-the-median, income-based threshold. Logit analysis shows that being nonwhite, being single with dependents, receiving public assistance, having no post-secondary education, and being unemployed increase the probability of being EB. We document four key empirical facts: (1) EB/non-EB status is persistent; (2) EB households have significantly higher marginal propensities to consume and marginal propensities to consume energy compared to non-EB households; (3) EB households experience lower expected energy consumption growth despite having higher expected income growth relative to non-EB households; and (4) EB households face more volatile energy consumption and income than non-EB households. Lastly, we show that both consumption inequality and energy consumption inequality have risen more moderately than income inequality over the 1999 to 2021 period. Inequality in residential energy consumption increased until 2009, then declined, whereas inequality in gasoline consumption for transport has risen steadily, reaching a level 50% higher in 2021 than in 1999.

Suggested Citation

  • Octavio M. Aguilar & Cristina Fuentes-Albero, 2025. "Energy Consumption and Inequality in the U.S.: Who are the Energy Burdened?," Finance and Economics Discussion Series 2025-026, Board of Governors of the Federal Reserve System (U.S.).
  • Handle: RePEc:fip:fedgfe:2025-26
    DOI: 10.17016/FEDS.2025.026
    as

    Download full text from publisher

    File URL: https://www.federalreserve.gov/econres/feds/files/2025026pap.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.17016/FEDS.2025.026?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
    ---><---

    More about this item

    Keywords

    Energy consumption; Energy burden; Inequality;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

    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:fip:fedgfe:2025-26. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Ryan Wolfslayer ; Keisha Fournillier (email available below). General contact details of provider: https://edirc.repec.org/data/frbgvus.html .

    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.