Objective and subjective measures of fuel poverty

As energy prices continue to rise to reflect the real cost of carbon, the numbers of households in fuel poverty is increasing rapidly. This paper uses a unique data set to explore one alternative measure of fuel poverty based on whether consumers feel able to afford their energy, similar to one introduced by the government a few years ago. We explore the links between an expenditure based and our subjective measure of fuel poverty and compare these differences with those between official measures. Amongst low income households, 28% spent more than a tenth of their income on energy in the home, and so would be likely to qualify as fuel poor under the most usual definition; but only 16% felt unable to afford sufficient energy to keep their homes warm. Amongst this group who felt they had difficulty in affording sufficient energy, less than half were ‘expenditure’ fuel poor. The paper argues that reintroduction of a self-reported measure by the government would be a valuable aid to policy development.