Energy Poverty is Not Only a Matter of Income and Inequality. The Role of Socio-Political Factors for Alleviating Energy Needs in European Countries

Abstract

The stringency of energy poverty in a country is usually related to low income and unequal distribution of earnings. In this paper, we enlarge the picture by showing how internal socio-political factors are associated with different measures of energy deprivation. Specifically, relying on the recently elaborated energy poverty indexes developed by OpenEXP, we show how energy deprivation among European countries correlates to a set of variables in which are included the governance indicators provided by the World Bank. Using different regression strategies, we find that the quality of institutions and regulatory processes are significantly related with the ability of European countries to effectively cope with energy poverty. On the side of policy, our empirical findings stress the importance and the potential effectiveness of targeted public interventions aimed at mitigating the impoverishment effects driven by fully deregulated energy markets.