The Effect of Energy Price Shocks on Household Food Security

Abstract

This paper examines how price shocks of energy resources including gasoline, natural gas, electricity and heating degree days affect three indicators of food insufficiency at a household level. Using the Current Population Survey-Food Security Supplement combined with energy price data from the Energy Information Administration and weather information from the National Oceanic and Atmospheric Administration, we find that positive price shocks in gas and natural gas increase the probability of food insecurity and food stress while negative price shocks of heating fuels decrease the probability each indicator of food stress. The most important effects occurred with negative heating fuel price shocks in the low income and cold state-residing low income subgroups. We also consider the effectiveness of federal assistance programs in cushioning households from price or weather shocks. We find that heating and food assistance are most effective in low income households that reside in cold states.