The Effect of Extreme Wildfire Exposure on Energy Poverty: Evidence from Australia's Black Saturday Bushfires

This study assesses the effects of the 2009 Black Saturday Bushfires (BSB), which was the deadliest bushfire in Australia's history, on household energy poverty. Using a linear panel event-study design, applied to matched longitudinal household and geographical data, our results suggest a significant increase in the likelihood of experiencing energy poverty among households residing within 15 kilometers of wildfire areas. Specifically, we find that for households directly affected by the fires, the likelihood of being in energy poverty increases by 10.45-12.23 percentage points in 2010, and by 12.30-13.62 percentage points in 2011, compared to 2005-2007, which is the reference period. We examine the causal effects of exposure to the BSB on personal wellbeing, labor market outcomes and community social capital and find that personal wellbeing and community social support were channels through which exposure to the BSB affected energy poverty. We also consider the role of personality, locus of control and financial foresight as moderators and find that greater openness to experience and adopting longer-term financial planning mitigated the effects of bushfire exposure on energy poverty.