Determinants of multidimensional energy poverty in Pakistan: a household level analysis

Abstract

Primary objective of this study is to identify and investigate the determinants of multidimensional energy poverty incidence and severity for the case of Pakistan. Logistic regression estimates suggest that male-headed households have higher probability of being multidimensional energy poor, increase in the age and education level of the household head, and increase in latitude of household location decreases the probability of multidimensional energy poverty significantly, whereas, households receiving foreign remittances and situated at a closer distance from nearest market are less likely to be multidimensional energy poor. Quantile regression analysis helps to understand the determinants of multidimensional energy poverty severity in different (20–80th) quantiles of multidimensional energy poverty deprivation score. Increase in latitude and proximity of household from nearby store causes the household’s multidimensional energy poverty score to significantly decrease for all quantiles. Our results further indicate that the households which received foreign remittances and experienced increase in annual income had attained a significant decrease in the multidimensional energy poverty severity. The improved house condition and its location in urban area significantly decreased the severity of multidimensional energy poverty in all quantiles. For sensitivity analysis, comparison of these estimates with ordinary least square estimates shows that it either over-predicts or under-predicts the effects of these factors owing to heterogeneity in the data. Quantile regression thus captures the complete variation in the distribution of the household multidimensional energy poverty scores. Estimates of different quantiles significantly vary except for the determinant of house ownership. New and flexible approaches based on provincial and regional differences can help policymakers at all government levels to alleviate multidimensional energy poverty while addressing energy access issue. Variations in impacts across quantiles also necessitate a dynamic strategy catering to the needs of lower and higher quantiles separately.