Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314575 
Year of Publication: 
2025
Series/Report no.: 
IZA Discussion Papers No. 17678
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Energy poverty and health appear to be closely related, yet robust evidence on whether and how they mutually influence each other over time is still limited. We employ a dynamic latent class model on rich longitudinal data from the Household, Income, and Labor Dynamics in Australia Survey to uncover patterns of dynamic interdependence between energy poverty and ill-health. Our approach integrates key modelling features, such as state dependence and time-varying unobserved heterogeneity, while also revealing and quantifying mechanisms of joint dependence over time. Unlike previous studies, our model shows that although energy poverty and ill-health seem to mutually influence each other, the effect of ill-health on energy poverty appears to be comparatively larger, suggesting that ill-health might be a stepping stone to energy poverty. In addition, we identify three main types of individuals corresponding to different socioeconomic profiles and varying levels of vulnerability to changes in energy prices. These findings may indicate the need for targeted interventions rather than exclusive reliance on energy subsidies.
Subjects: 
energy poverty
health
dynamic latent class models
HILDA
JEL: 
C33
C35
I31
I32
Document Type: 
Working Paper

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