The Unequal Burden: Socioeconomic and Housing Determinants of Energy Poverty in the Netherlands

Abstract

This paper investigates the determinants of energy poverty in the Netherlands using a multidimensional approach, combining both subjective and objective indicators. It examines three key indicators of energy poverty: arrears on utility payments, self-reported inadequate heating, and the energy burden (measured both continuously and as a high-burden threshold). The central research question is: “How do socioeconomic and housing-related factors affect energy poverty, and have these effects changed during the energy crisis of 2022-2023?” The study uses fixed effects linear regression models and probit models to determine how income, homeownership status, housing quality, and other factors influence each energy poverty indicator, using household-level panel data from Dutch households (2008-2024). The empirical results indicate that higher income and better housing quality consistently reduce the likelihood of energy poverty. However, there are notable differences across the three indicators: homeowners, e.g., are less likely to report utility arrears or thermal discomfort but are more likely to face a high energy burden. Furthermore, the energy crisis increased the likelihood of inadequate heating among all income groups, but disproportionately affected middle-income households, while no significant effects are found for utility arrears. This suggests that affordability was protected at the cost of thermal comfort. Moreover, this suggests that government support for low-income households protected them from severe financial difficulties during the energy crisis. These findings underscore the need for a multidimensional approach in measuring energy poverty, where both objective and subjective indicators should be included. In addition, policymakers should give greater attention to specific household vulnerabilities, such as bad housing quality, tenant status, and middle-income households during a crisis.