Sweating the energy bill: Extreme weather, poor households, and the energy spending gap

Jacqueline Doremus, Irene Jacqz and Sarah Johnston ()
Additional contact information
Sarah Johnston: Department of Agricultrual and Applied Economics, University of Wisconsin-Madison

No 2002, Working Papers from California Polytechnic State University, Department of Economics

Abstract: We find energy spending disparities that indicate extreme weather causes hardship for low-income households. Using the 2004-2018 U.S. Consumer Expenditure Survey, we estimate the relationship between temperature and energy spending separately for low-income and all other households. Both groups respond similarly -- in percentage terms -- to moderate temperatures, but low-income households' energy spending is half as responsive to extreme temperatures. We find similar disparities in the food spending response to extreme temperature, consistent with a credit constraints mechanism. These results suggest adaptation to extreme weather, such as air conditioning use, is prohibitively costly for low-income households.

Pages: 29 pages
Date: 2020
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (2)

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https://drive.google.com/file/d/1aMwG6KBTeGr7tTmm4 ... /view?usp=drive_link First version, 2020 (application/pdf)

Related works:
Journal Article: Sweating the energy bill: Extreme weather, poor households, and the energy spending gap (2022)
Working Paper: Sweating the energy bill: Extreme weather, poor households, and the energy spending gap (2021)
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