How Do We Measure Energy Poverty? The Limitations of Energy Expenditure as an Indicator

IBAÑEZ MARTIN, MARÍA MARÍA; ZABALOY, MARIA FLORENCIA; DUBOIS, FEDERICO

Living with Energy Poverty Perspectives from the Global North and South

Routledge

Lugar: New York; Año: 2024; p. 29 - 41

The discourse around energy poverty, like economic poverty, has developed from one-dimensionality to a multidimensional perspective. The most recent advances recognize that energy poverty refers not only to access and affordability of energy services, but also to the quality of energy and the equipment available to satisfy the different energy uses. In this way, Ibáñez Martin, Zabaloy and Guzowski (2019) define energy poverty as the deprivation of essential energy services for human life, arising from a lack of access, quantity, and quality not only of energy but also of appliances This deprivation is caused by various factors (socioeconomic, geographic, buildings, cultural and so on), which ultimately affects the level of well-being of household members. Also, the most severe state of energy deprivation, called energy indigence, refers to the lack of access to energy services (ibid.). Despite recognising the multidimensionality, most of the antecedents that empirically address the subject do so from a single indicator. The studies commonly resort to the indicator proposed by Boardman (1991), under which a household is energy poor if it allocates more than 10% of its income to energy expenditure. Without considering spending as an input, there are also the indicators proposed by Nussbaumer, Brazilian, Modi and Yumkella (2011), which focuses on the deprivation of access to modern energy services. Alternative approaches have been proposed since then. For instance, Healy (2004) measures fuel poverty with an index that considers three objective and three subjective indicators. The objective indicators address housing conditions and equipment while the subjective ones capture if people experience any kind of deprivation in their energy needs. Dehays and Schuschny (2018) propose indicators that seek to assess the degree of social inequality with respect to household access and use of energy. García Ochoa (2014) applies the Method of Satisfaction of Absolute Energy Needs. Under this approach, energy poverty occurs when a household does not have all the assets (appliances or equipment) considered essential to satisfy the needs of household members. There are several studies that applied this method in the literature (Lara Alfaro, 2017; Velásquez, 2022; Schimer et al., 2023). There are also other advances in terms of multidimensional indicators to measure energy poverty, both for Argentina (Durán and Condorí, 2016) and the rest of the world (Bollino and Botti, 2017; Hernández et al., 2018; Mendoza et al., 2019; Sokołowski et al., 2020).The objective of this chapter is to carry out an application of the various indicators proposed by the literature for the measurement of energy poverty in Argentina and to show the dissimilar results that can be reached depending on the indicator used. On the other hand, the discussion regarding the usefulness of the self-reported energy expenditure indicator will be presented. The results obtained from the energy expenditure declared in the National Household Expenditure Survey 2017-2018, conducted by the National Institute of Statistics and Censuses (INDEC to use its acronym in Spanish), will be compared to the expenditure calculated from a model, following Dubois (2022), to estimate consumption per household based on its equipment and declaration of use of this survey. The main objective of this analysis is to expose that empirically approaching a multidimensional phenomenon with a single indicator based on energy expenditure is an extreme simplification of a central and complex problem at the present in the world.