Abstract:
This paper examines the impact of energy poverty on subjective well-being in Germany using longitudinal data from the German Socio-Economic Panel (SOEP) over the period 2010-2023. Exploiting within-individual variation, we estimate fixed-effects models using objective, subjective, and composite indicators of energy poverty. Energy poverty is associated with a statistically significant and economically meaningful decline in life satisfaction, even after controlling for income, health status, and household characteristics. The negative association persists among households that are not income-poor, indicating that energy poverty constitutes a distinct dimension of material deprivation. Effects are strongest for subjective and multidimensional indicators, highlighting the importance of perceived energy deprivation and lived experience. Causal mediation analysis suggests that these well-being losses operate primarily through psychological and emotional channels. These findings imply that policies targeting energy affordability and housing efficiency may generate substantial welfare gains beyond income-based support.
