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Energy Policy
Article . 2024 . Peer-reviewed
License: CC BY
Data sources: Crossref
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Inflation and distributional impacts: Have mitigation policies been successful for vulnerable and energy poor households?

Authors: Rossella Bardazzi; Francesca Gastaldi; Francesca Iafrate; Rosaria Vega Pansini; Maria Grazia Pazienza; Corrado Pollastri;

Inflation and distributional impacts: Have mitigation policies been successful for vulnerable and energy poor households?

Abstract

The aim of this paper is to assess the distributional impact of the 2021-23 price increase on Italian household expenditure and energy poverty. Using the microsimulation model developed by the Italian Parliamentary Budget Office, the analysis provides a comprehensive assessment of the uneven impact of inflation across the population and measures how mitigation policies have compensated for this impact. In particular, we focus on vulnerable households to examine whether energy poverty has been affected by the rise in energy prices and to what extent policies have succeeded in protecting these families. Our main findings show that in 2022, mitigation policies have stabilised the impact of inflation by compensating households for almost half of the effect of the price shock on their expenditure. Although not particularly well targeted at energy-poor households, the mitigation policies have protected households from a worsening of their energy vulnerability. However, the reduction of support measures adopted in 2023 is expected to increase the area of vulnerability, including households that are particularly sensitive to high energy costs. Finally, the behavioural response of households was also considered by estimating price elasticities of energy demand and measuring their impact on the simulated scenarios using a sensitivity approach.

Country
Italy
Keywords

Inflation; distributional effects; energy price; price elasticities; microsimulation modelling; Italy

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citations
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
8
Average
Average
Top 10%
Green
hybrid
Related to Research communities
Energy Research