Beyond Income and Inequality: The Role of Socio-political Factors for Alleviating Energy Poverty in Europe

Abstract

In each country, the occurrence of energy poverty among resident households is usually related to low income and its unequal distribution. Like other manifestations of material deprivation, however, such a phenomenon is likely to be also correlated with some internal socio-political factors that allow its persistence by preventing effective solutions. In this paper, we build and analyse a dataset for European countries by assessing the role of the perceived quality of internal public governance on different measures of energy deprivation. Specifically, we rely on the Worldwide Governance Indicators provided by the World Bank and estimate an array of panel models. After controlling for income, income inequality, energy prices, and weather conditions, we find that high government effectiveness, good regulatory quality, widespread property rights, contract enforcement, and corruption control are significantly associated with lower energy poverty. In addition, we consider the policy implications of this broader perspective on energy deprivation.