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Fuel Poverty in Europe: A cross-country analysis using a new composite measurement

Description

Fuel poverty has generally been considered a British and Irish phenomenon, and the vast majority of research has emanated from those two countries. In measuring the magnitude of the problem, a standard definition has been used which defines fuel-poor households as those who spend more than 10% of their income on home-heating. However, this definition has a number of limitations, most notably for cross-country comparisons. An alternative methodology is proposed in this paper which employs a suite of ‘consensual’ indicators to derive a composite measurement of poverty. A comparative, quantitative analysis is undertaken for the first time using comparable, longitudinal data, which calculates the extent of fuel poverty in 14 European countries. Socio-economic analysis identifies the incidence among various social groups in each of the countries. Detailed multivariate Probit regression models are also employed to examine those factors that influence the probability of being fuel poor. Using this Consensual approach, lower levels of aggregate fuel poverty are reported in the British Isles (although low-income households, such as lone parents, suffer highly), however dramatic levels are found in southern Europe, where very little empirical research has been undertaken previously