Household energy price resilience in the face of gas and electricity market crises

Burlinson, Andrew; Davillas, Apostolos; Giulietti, Monica; Price, Catherine Waddams

Abstract

Despite the provision of financial support by the Government in response to the recent energy crisis, the resilience of households to the ensuing high energy prices remains to be established. In this study we propose a new definition of resilience, specifically ‘energy price resilience’, and put forward an empirical approach to capture low energy price resilience (LENRES). We also assess its associated socio-economic and demographic factors using a representative UK panel. Using models that account for time-invariant unobserved heterogeneity, we further explore the association between LENRES and a rich set of health, disability, and wellbeing outcomes for adults and children through two fundamental routes: (1) the low energy and thermal affordability channel (LEA); and (2) the low energy and financial solvency channel (LES). We find that employment status, housing tenure, inability to save, energy prepayment methods, and household composition are systematic socio-economic correlates of LENRES. Moreover, LENRES is associated with worse health, disability, and wellbeing outcomes for adults; these associations are primarily driven by the LES component. On the other hand, in the case of children, LENRES at home is only systematically associated with life satisfaction, rather than general health. Our results suggest that targeted energy interventions could generate wider societal benefits.

Citation

Burlinson, A., Davillas, A., Giulietti, M., & Price, C. W. (2024). Household energy price resilience in the face of gas and electricity market crises. Energy Economics, 132, Article 107414. https://doi.org/10.1016/j.eneco.2024.107414

• Journal Article Type: Article
• Acceptance Date: Feb 16, 2024
• Online Publication Date: Feb 21, 2024
• Publication Date: 2024-04
• Deposit Date: Mar 9, 2024
• Publicly Available Date: Mar 9, 2024
• Journal: Energy Economics
• Print ISSN: 0140-9883
• Electronic ISSN: 1873-6181
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 132
• Article Number: 107414
• DOI: https://doi.org/10.1016/j.eneco.2024.107414
• Keywords: Energy crisis; Energy resilience; Energy prices; Health and wellbeing
• Public URL: https://nottingham-repository.worktribe.com/output/32244474
• Publisher URL: https://www.sciencedirect.com/science/article/pii/S0140988324001221?via%3Dihub
• Additional Information: This article is maintained by: Elsevier; Article Title: Household energy price resilience in the face of gas and electricity market crises; Journal Title: Energy Economics; CrossRef DOI link to publisher maintained version: https://doi.org/10.1016/j.eneco.2024.107414; Content Type: article; Copyright: © 2024 The Authors. Published by Elsevier B.V.