Latest Publication: Income-Related Inequality Aversion to Energy Limiting Behavior

This is our latest article on energy limiting behavior (defined as the case when households are not able to meet their basic energy needs at home due to financial stress). Whereas we’ve found the empirical evidence of such a behavior, in this latest piece, we investigated how the public in the U.S. values the inequality in energy limiting behavior across income groups. This is recently published in Energy Economics titled Estimating the income-related inequality aversion to energy limiting behavior in the United States.

You can see the full text via this link for 50 days (valid from July 1, 2024): https://authors.elsevier.com/a/1jMFLW3fc%7E46P

You can also find the accepted version of the manuscript here.

Based on the extended concentration index in welfare economics, we adopted a technique from behavioral economics to elicit the income-related inequality aversion using a choice experiment. Here are what we found:

• Participants show a pro-poor propensity.

• The participants for whom heating is essential in winter are more pro-poor than those for whom cooling is essential in summer.

• Older participants are more pro-poor than younger participants.

Our findings provide insights into how the broader public values energy justice, which further provides important policymaking implications. Many thanks to my collaborator Dr. Destenie Nock. This work is part of my Postdoctoral Fellowship in Data Curation for Energy Social Sciences (specifically supported by a research microgrant). This fellowship is made possible in partnership with the Council on Library and Information Resources (CLIR), with the generous support of the Alfred P. Sloan Foundation.

Abstract:
Distributive energy justice is measured by the degree to which, and whether, different members of society have equal share in the benefits and burdens of the energy system. One way to achieve distributional energy justice is to ensure all households, regardless of income, can use as much energy as they need to heat and cool their home to desired temperature. We define a household’s cooling balance point (CBP) as the ideal set temperature at which the household desires to keep its living space in summer; the heating balance point (HBP) is defined as the ideal set temperature in winter. To quantify the extent to which balance points were disproportionately concentrated among certain income groups, we used the extended concentration index. This index has an inequality aversion parameter that reflects the value judgment of a society. If this parameter <1, the society is pro-rich; if this parameter >1, as it increases, the society becomes more pro-poor. We estimated the empirical value of the income-related inequality aversion in eight U.S. states and examined several effects of demographic characteristics on inequality aversion.

In an online survey, 1066 (from four southern states) and 906 (from four Midwest states) participants made choices between energy policies leading to different distributions of CBP (southern) or HBP (Midwest) across five income groups in a hypothetical society. Participants showed a pro-poor propensity: the median inequality aversions were 1.37, 95% CI of [1.35, 1.39] (CBP) and 1.56, 95% CI of [1.56, 1.60] (HBP). For both CBP and HBP: younger participants were less averse to inequality. For CBP, blacks (vs. whites) and conservatives (vs. centrist) were less averse to inequality; for HBP, Hispanics (vs. whites), low (vs. high) education participants, and those whose homes were well insulated (vs. adequately and vs. poorly insulated) were less averse to inequality. Our findings provide insights into how the broader public values energy justice, which further provides important policymaking implications.