Health and Housing Energy Expenditures: A Two-Part Model Approach

Abstract

Interest in the interaction between energy and health within the built environment has been increasing in recent years, in the context of sustainable development. However, in order to promote health and wellbeing across all ages it is necessary to have a better understanding of the association between health and energy at household level. This study contributes to this debate by addressing the case of Portugal using data from the Household Budget Survey (HBS) microdata database. A two-part model is applied to estimate health expenditures based on energy-related expenditures, as well as socioeconomic variables. Additional statistical methods are used to enhance the perception of relevant predictors for health expenditures. Our findings suggest that given the high significance and coefficient value, energy expenditure is a relevant explanatory variable for health expenditures. This result is further validated by a dominance analysis ranking. Moreover, the results show that health gains and medical cost reductions can be a key factor to consider on the assessment of the economic viability of energy efficiency projects in buildings. This is particularly relevant for the older and low-income segments of the population.