Behavioral and financial coping strategies among energy-insecure households

Abstract

When households struggle to pay their energy bills and avoid being disconnected from the grid, they may accrue debt, forgo expenses on food, and use space heaters or ovens to warm their homes. These coping strategies can introduce significant physical and financial risks. In this study, we analyze an original survey with a representative sample of low-income households during the first year of the COVID-19 pandemic, from June 2020 to May 2021. We evaluate the prevalence of a wide range of coping strategies and empirically estimate the determinants of these strategies. We find that more than half of all low-income households engage in at least one coping strategy, and many use multiple strategies. Households with vulnerable members, including young children or those who rely on electronic medical devices, and households that live in deficient housing conditions, are more likely to use a range of coping strategies, and many at once. Our findings have direct implications for public policy improvements, including modifications to the US Weatherization Assistance Program, the Low-Income Home Energy Assistance Program, and state utility disconnection protections.

Utility disconnection protections and the incidence of energy insecurity in the United States

“…Evidence shows that when attempting to avoid utility disconnection, households often engage in a set of economically harmful coping strategies, such as accruing credit card debt or strategically skipping bill payments. 22 In this context, our findings suggest that disconnection moratoria have an economic impact beyond utility service shutoffs by allowing families to avoid tradeoffs between keeping the power on and carrying debt, having enough to eat, or seeking medical assistance.…”

Hot or cold temperature disproportionately impacts U.S. energy burdens

“…One category of policy response may be direct cash payments to help the federal government better target energy-related vulnerable populations so that energy assistance funds such as the Low-Income Home Energy Assistance Program and the Weatherization Assistance Program can be directed to the most affected and neediest populations. Particularly, for low-income people caught in the energy poverty trap, such assistance can reduce financial hardship and help them make specific upgrades [69]. Further guidance through energy audits and efficiency programs can provide suggestions and inkind support.…”

Energy Inequality Indicators: A Comprehensive Review for Exploring Ways to Reduce Inequality

“…This systematic literature review has identified that various terms are used to address similar aspects of energy inequality (see Figure 1) [17], including energy poverty [9,14,18,20,21,26,32,37], energy insecurity [17,38], fuel poverty [39][40][41][42][43], environmental inequality [34], carbon inequality [44], and environmental degradation [13,31,36]. To achieve the objective of this study, which is to identify energy inequality dimensions and their indicators and explore ways to reduce them, it is crucial to establish a common understanding and terminology.…”

“…The lack of equitable access to energy and the financial burden it poses contribute to the complex dynamics of energy inequality and insecurity, necessitating attention and action within the framework of energy justice [17]. In the context of household, energy insecurity refers to a household's struggle to pay energy bills and exposure to inadequate residential energy services, which is a widespread problem across the world [38]. Households experiencing energy insecurity face challenging choices every day as they try to balance the need to keep their power on and maintain safe indoor temperatures, while also meeting other essential needs like food and healthcare.…”