Energy affordability and subjective well-being in China: Causal inference, heterogeneity, and the mediating role of disaster risk

Abstract

This paper examines how energy affordability affects the subjective happiness of Chinese households in the face of an extreme event that could affect the energy industry. We use two waves of nationally representative survey data to examine the variation in subjective happiness with the level of energy affordability. The results suggest that worsening energy affordability reduces household happiness. We also present robust evidence that energy affordability is also associated with where energy is sourced. We further show that this nexus is heterogeneous in that Eastern China households sense energy affordability as the key determinant of happiness. The perceived risk of extreme events moderates a household's subjective well-being when considering energy affordability. Our results call for a targeted approach to re-allocate economic benefits for alleviating energy poverty.