Energy poverty and health: panel data evidence from Australia

Australia's diverse climate makes it vulnerable to cold winters and extremely warm summers, characterised by severe bushfires and heat waves. Thus, unlike most European countries, energy poverty in Australia is linked with difficulty both maintaining adequate warmth during winter and ensuring adequate cooling during summer. Energy poverty in Australia is, therefore, associated with cold-and-heat-related health issues. We draw on 13 waves of representative panel data for the Australian adult population to examine the relationship between energy poverty and self-assessed health. We use both objective and subjective indicators of energy poverty. We instrument for energy poverty using energy prices. When we instrument for energy poverty, we find that a standard deviation increase in energy poverty is associated with a decline in general health between 0.099 and 0.296 standard deviations. The finding that energy poverty lowers health is robust to different ways of measuring health and alternative methods to addressing endogeneity of energy poverty, including using internal instruments, dynamic panel methods and propensity score matching.