Nexus between energy poverty and economic vulnerability: Evidence from low and middle income economies

ABSTRACT

Energy poverty is one of the important facets of sustainable development, but less attention to the linkage of energy poverty to economic vulnerability. This study proposes that two variables would have a mutual linkage, which is tested through a sample of 73 low- and middle-income economies. By applying panel Granger causality and two-step system generalised method of moments estimate to a system equation of two variables, the robust results are as follows. First, mutual causalities between economic vulnerability and energy poverty are evidenced. Second, economic vulnerability appears to have an increased influence on energy poverty; and energy poverty, in return, shows similar effects on economic vulnerability. Third, the nexus is mostly consistent in 46 low- and lower-middle-income economies and 27 upper-middle-income economies. The results indicate the important mutual link between economic vulnerability and energy poverty at a global level, which demands urgent action on appropriate policies to deal with energy poverty

KEYWORDS:

• Energy poverty
• clean fuels
• electricity consumption
• economic vulnerability

Authors’ contributions

Canh Phuc Nguyen: Conceptualization, Methodology, Software, Data curation, Validation, Formal analysis, Writing- Original draft preparation, Writing- Reviewing and Editing; Thanh Dinh Su: Validation, Writing- Reviewing and Editing.

Availability of data and material

The data is available from corresponding author upon reasonable requests.

Code availability

The code of Stata software is available from corresponding author upon reasonable requests.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ The data is updated by these authors on the website: www.ferdi.fr

² Countries with one hundred per cent of the population having access to clean fuels and technologies for cooking or access to electricity are also dropped out of the sample since these enjoy the lowest level of EP and their EP does not show much evolution.

³ To save space of manuscript, we do not report the results of VIFs in the manuscript. The results can be provided upon requests. Author(s) are much thankful for a helpful comment from an anonymous reviewer.

⁴ The results are provided upon requests.

Additional information

Funding

This study is funded by the University of Economics Ho Chi Minh City, Vietnam