Impact of household income on household energy consumption and energy poverty from a mental account perspective

Abstract

[Objective] Exploring the impact of household income on household energy consumption and energy poverty from the perspective of mental account can provide a theoretical basis for solving the contradiction between the increase of household income and the coexistence of low energy consumption level and high energy poverty in China. [Methods] Based on the China Family Panel Studies (CFPS) data from 2016 to 2018, this study measured the energy poverty in China, and then explored the impact of household income on household energy consumption and energy poverty from the perspective of mental account. [Results] (1) At present, China’s energy poverty is relatively serious. An increase in household income can promote household energy consumption and reduce energy poverty. (2) There is a mental account effect in Chinese households, and energy consumption and energy poverty are mainly affected by the wage income account and business income account. (3) The results of the mechanism analysis show that the wage income account and the business income account can promote the household energy consumption and reduce the incidence of energy poverty by increasing the willingness of household energy consumption and willingness of improving household energy facilities. (4) The results of heterogeneity analysis show that for households with higher energy consumption threshold, lower household income, and being in the eastern region, the mental account of income has a more significant impact on their energy consumption and energy poverty. [Conclusion] Therefore, for the current phenomenon of low energy consumption and high energy poverty in China, we should pay attention to the difference in household income sources, focus on increasing the wage and business income of households, further reduce the cost of household energy consumption, and increase the willingness of household energy consumption.

Keywords

• mental account|energy consumption|energy poverty|household income|wage income|business income|china