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Dynamic Properties of Energy Affordability Measures

Peter Heindl and Rudolf Schüssler

No 746, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: Measures of affordability are applied in practice, e.g., to assess the affordability of energy services, water or housing. They can be interpreted as measures of deprivation in a specific domain of consumption. The large body of literature on affordability measure has little overlap with the existing literature on poverty measurement. A comprehensive assessment of the response of affordability measures as a result of changes in the distribution of income or expenditure is missing. This paper aims to fill this gap by providing a conceptual discussion on the ‘dynamics’ of energy affordability measures. Several types of measures are examined in a microsimulation framework to assess their dynamic properties. Our results indicate that some measures exhibit odd dynamic behavior. This includes measures used in practice, such as the low income/high cost measure and the double median of expenditure share indicator. Odd dynamic behavior is attributed to definitions made with respect to higher moments of the expenditure distribution. Definitions that rely on a percentage share of expenditure relative to income or an absolute or relative income poverty line fare well from a dynamic perspective.

Keywords: affordability measure; energy poverty; fuel poverty (search for similar items in EconPapers)
JEL-codes: D63 I32 Q48 (search for similar items in EconPapers)
Pages: 23 p.
Date: 2015
New Economics Papers: this item is included in nep-ene and nep-pke
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Citations: View citations in EconPapers (64)

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Journal Article: Dynamic properties of energy affordability measures (2015) Downloads
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