The power of digitalization: A study of the effect of the digital economy on household energy poverty

Kaixia Zhang and Caiqi Bu

Energy, 2024, vol. 313, issue C

Abstract: Severe energy poverty is one of the major challenges hindering the achievement of sustainable development in developing countries, while the current rapid advances in the digital economy offer new ways to alleviate energy poverty, the household-level effects of which urgently need to be supported by more empirical research. Using Chinese household-level panel data from 2010 to 2020, we identify the causal effects of the digital economy on household energy poverty by employing the "Broadband China" pilot policy and applying the difference-in-differences (DID) method. Research shows that the digital economy can significantly mitigate household energy poverty, especially among low earning and low educational inputs households. Improving energy accessibility through increased Internet use and promoting energy affordability through increased employment and income are the main channels through which the digital economy can exert an energy poverty reduction effect. Moreover, welfare analyses indicate that the power of digitalization not only reduces household energy poverty, but also further enhances the residents' welfare and improves local carbon reduction welfare performance. This study will provide new ideas from the viewpoint of digital economy development to improve household energy poverty governance in developing countries.

Keywords: Household energy poverty; Digital economy; DID; Welfare analysis (search for similar items in EconPapers)
JEL-codes: O38 Q49 Q56 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:313:y:2024:i:c:s0360544224034303

DOI: 10.1016/j.energy.2024.133652

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