How Can We Gauge Energy Poverty? A Multidimensional Approach

Abstract

This paper presents a new approach to measuring energy or fuel poverty for developed countries. As such, it develops a multidimensional energy poverty index (MEPI), which can evaluate energy poverty from a multidimensional angle. The MEPI is composed of three attributes (dimensions) of energy poverty in developed countries: energy costs, income, and energy efficiency of housing. We apply this measure to gauge energy poverty in Japan after the 2000s, focusing on the year of the Great East Japan Earthquake and the Fukushima nuclear accident. Based on unique microdata, the results show that energy poverty has been aggravated in Japan since the 2000s. Analyzing the situation by household type, we can categorize mother-child and single-aged households, in particular, as vulnerable to energy poverty. In addition, the results indicate the severe impact of energy price hikes after the Fukushima accident on energy poverty aggravation, especially for vulnerable households.

Keywords: Energy poverty, fuel poverty, Great East Japan Earthquake, housing, measurement, multidimensional poverty, vulnerability

JEL Classification: D63, I32, Q49