Energy poverty and food insecurity: Is there an energy or food trade-off among low-income Australians?

Abstract

Large price rises can lead to what has been termed a ‘heat or eat’ trade-off, where some low-income individuals must choose between energy use and putting food on the table. Low-income individuals are particularly at risk. There are effects on physical health from either restricted energy use or restricted food intake (in terms of quantity or nutritional value) and there may also be effects on mental health due to stress associated with being unable to pay bills or buy food. Considering escalating energy and food prices, this study investigates the energy or food trade-off among low-income people in Australia. While there is some literature on the heat or eat trade-off, our contribution lies in our use of detailed longitudinal population-representative data and multivariable analysis with a focus on low-income individuals who are most vulnerable. Among all low-income households, a 1% increase in the relative price of electricity increases energy expenditure by 0.44% and reduces food expenditure by 0.09% and these effects are statistically significant. For those in poverty, we find a 1% increase in the relative price of electricity increases energy expenditure by 0.37% but has no significant effect on food expenditure. This is consistent with individuals in poverty having economised as far as possible and being unable to reduce expenditure any further. For those near poverty the increase in price reduces food expenditure by 0.20% although there is no significant effect on energy expenditure, indicating individuals are economising on energy use to offset the price increase. For the remaining low-income individuals, the price increase results in a trade-off in which energy is prioritised over food. Reduced food expenditure, however, does not seem to translate into going without meals.