Using Hills' low-income-high-cost approach to shed new light on housing and energy deprivations across EU households

Sofia Maier Essinger, Gemma Riera Mallol () and Kateryna Bornukova ()
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Gemma Riera Mallol: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Kateryna Bornukova: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en

No 2026-01, JRC Working Papers on Taxation & Structural Reforms from Joint Research Centre

Abstract: "Over the past few years, with the recovery from the COVID-19 and the global energy crisis, EU households have faced sharp increases in the prices of necessities such as energy and food. These pressures compound a longer-term housing affordability crisis. Despite the abundance of indicators on income, energy and housing poverty, only a few studies have consistently addressed their interactions, showing strikingly little overlap among them. In this context, we use an adaptation of John Hills’ Low-Income High Cost (LIHC) indicator originally developed for the UK to consistently assess both energy and housing deprivations across all EU27 countries. This approach minimizes ""false positives"" by excluding households at the top of the income distribution who may have high energy or housing costs but are not genuinely deprived. Additionally, we examine whether middle-class households fall below poverty thresholds if they were to face median equivalised energy and housing expenditures, revealing a form of ""hidden poverty"" not captured by conventional income-based measures. Using this approach, we identify where in Europe these deprivations are most severe and which population groups are most affected. These findings can inform the design of more targeted poverty alleviation policies."

Date: 2026-04
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