Does Income Inequality Influence Energy Consumption in the European Union?

Mihaela Simionescu and Bogdan Oancea
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Bogdan Oancea: Faculty of Business and Administration, University of Bucharest, 030018 Bucharest, Romania

Energies, 2025, vol. 18, issue 4, 1-19

Abstract: This study examines the emerging challenge of how income inequality affects household energy consumption within the European Union amidst the ongoing energy crisis. Using the Gini index and the gender pay gap as indicators of income inequality, the analysis covers the period 2000–2023 across EU member states. Dynamic panel data models reveal that the Gini index negatively impacted final energy consumption per capita as well as energy consumption specifically from gas oil and diesel, while the gender pay gap is associated with less energy consumption in the realms of natural gas and ambient heating. Causality is further explored through recent methodology developed for panel data and Bayesian networks, and the results confirm the causality between energy consumption and income inequality. To address the complex relationship between income inequality and energy consumption, policymakers should implement integrated strategies promoting energy efficiency, clean energy transitions, gender equality, and social safety nets, particularly in light of the energy crisis exacerbated by the Russia–Ukraine conflict.

Keywords: income inequality; gender pay gap; Gini index; energy consumption (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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