Household Energy Poverty in European Union Countries: A Comparative Analysis Based on Objective and Subjective Indicators

Abstract

The study aims to assess household energy poverty in European Union (EU) countries, comparing them based on the Objective Energy Poverty Index and the Subjective Energy Poverty Index. The Objective Energy Poverty Index is derived from indicators such as energy expenditure share, risk-of-poverty rate, and electricity prices. The Subjective Energy Poverty Index includes indicators such as the inability to keep the home adequately warm, arrears on utility bills, and bad housing conditions. Both indices aggregate the indicators mentioned above using equal and non-equal weighting approaches. The analysis uses country-level data from 2019 to 2023 sourced from Eurostat. The findings indicate considerable variation in household energy poverty across the EU, with more pronounced inequalities in subjective indicators than objective ones. Additionally, the study reveals a weak correlation between the Objective Energy Poverty Index and the Subjective Energy Poverty Index, leading to differing country rankings based on these indices. However, the choice of weights in constructing the energy poverty indices does not significantly impact a country’s energy poverty ranking. The paper also identifies countries where household energy poverty decreased in 2023 compared to 2019 and those where it increased. Regarding the Subjective Energy Poverty Index, Croatia and Hungary showed the most notable improvement in their rankings among European countries, while France, Germany, and Spain deteriorated their positions. According to the Objective Energy Poverty Index, Bulgaria, Croatia, Portugal, and Spain demonstrated the most significant improvement, whereas Greece experienced a considerable decline.