On the power of indicators: how the choice of fuel poverty indicator affects the identification of the target population

Florian Fizaine and Sondès Kahouli ()

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Abstract: In light of the creation of the EU Energy Poverty Observatory (EPOV) in January 2018 and the increase in debates on how fuel poverty is measured, we propose a critical analysis of fuel poverty indicators and demonstrate that choosing a given fuel poverty indicator and, in particular, its threshold level, is central to the identification of the fuel-poor population. First, we conducted an inter-indicator analysis to show how profiles of fuel-poor households vary depending on the indicator selected. More specifically, after identifying groups of affected households using a set of objective and subjective indicators, we designed a multidimensional approach based on a combination of a multiple correspondence analysis and a hierarchical and partitioning clustering analysis to study their characteristics. Using this framework, we highlight the difficulty of identifying a "typical profile" of fuel-poor households due to the significant variability in their characteristics, and we show that the composition of the population depends on the choice of the indicator. Second, we applied an intra-indicator analysis using two objective expenditure-based indicators with thresholds. In particular, we conducted a sensitivity analysis based on a logit model including variables describing household and dwelling characteristics. We show that the profiles of fuel-poor households as well as the drivers of fuel poverty vary considerably with the chosen threshold level. Given these findings, we stress the need to review how we currently rely on conventional fuel poverty indicators to identify target groups and give some recommendations.

Keywords: Fuel poverty; Group identification; Indicator dismantling; Multidimensional analysis; Sensitiv-ity analysis (search for similar items in EconPapers)
Date: 2018-10-09
New Economics Papers: this item is included in nep-ene and nep-eur
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Published in American Economic Journal: Applied Economics, 2018, ⟨10.1080/00036846.2018.1524975⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01957436

DOI: 10.1080/00036846.2018.1524975

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