Residential electricity access : objective versus subjective measures of energy poverty in Texas

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Date

2019-08

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Agbim, Chinelo N.

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Abstract

Policymakers in developed countries are increasingly conscious of the pervasiveness of energy poverty, especially in the U.S. where 31% of households experienced energy poverty in 2015. Energy poverty is defined as households that do not have reliable, accessible, and affordable energy services and is especially prevalent among low-income households. The vagueness of this definition has created challenges for policymakers who must estimate the need for energy assistance programs. Historically, in Europe and the U.S., an energy expenditure to income ratio (i.e. objective energy burden) has been used to estimate energy poverty where individuals who spend greater than a certain threshold are energy poor. For instance, in Texas 22% of households spend more than 8% of their income on energy expenditures. However, researchers in Europe have argued that objective energy poverty measures do not capture household, demographic, and health characteristics that have increasingly been identified as drivers of energy poverty. Further they do not account for temporal and spatial variation in residential energy spending, pricing, or consumption patterns. Although survey studies in Europe have used subjective (i.e. stated) measures to identify individuals living in energy poverty, there have been no empirical quantitative analyses comparing energy poverty metrics in the U.S. Using survey data from the Texas Energy Poverty Research Institute this study: (1) compares the household, demographic, financial, and health indicators of objectively measured energy poverty to subjectively measured energy poverty, (2) compares objectively measured energy poverty as well as subjectively measured energy poverty to existing bill assistance eligibility criterion, and (3) analyzes the regional variation in percent of income spent on electricity expenditures. The findings reveal that while objectively and subjectively measured energy poverty are associated with each other, they are driven by different characteristics. The results also indicate regional variation, with individuals in Southwest Texas spending nearly twice as much of their income on their electricity bills as other regions. This study has implications for policymakers who must estimate the need for electricity assistance programs.

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