Abstract Book of the 8th International Conference on Research in Business, Management and Finance
Year: 2025
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Institutional And Fiscal-Policy Factors of Energy Poverty Volatility
Eftychia Zaroutieri, Athanasios Anastasiou
ABSTRACT:
Structural inequalities have raised awareness of energy issues related to access and affordability. This study explores the macroeconomic, fiscal, and institutional factors of energy poverty volatility in the EU from 2003 to 2022. Using a rolling window approach, we calculate the standard deviation of a key energy poverty indicator that reflects short-term volatility. To investigate the dynamic patterns of volatility, we exploit a Generalized Structural Equation Model (GSEM) that estimates the direct and indirect pathways through which fiscal, macroeconomic, and institutional variables influence volatility. The results suggest that higher GDP per capita growth, general government public spending, capital flows and households’ expenditure for maintenance of dwellings are directly associated with higher volatility. Nevertheless, political stability and expenditures of households for housing, water, electricity and fuels significantly reduce volatility. Considerable indirect effects are also uncovered. Contractionary fiscal policies can indirectly amplify the detrimental effects of energy poverty volatility by driving economic expansion that intensifies energy demand pressures, reduces state support through subsidies, and undermines social protection mechanisms. The empirical results further suggest that higher EU-level economic uncertainty undermines political stability, and increases energy poverty volatility. Videlicet, the uncertainty in the European economy discourages investment flows and spending which threaten the economic stability within countries and the living conditions of the vulnerable populations. The findings provide significant insights for the implication of fiscal and institutional policies that mitigate the impact of systematic disruptions and promote equitable energy access across the EU.
Keywords: Economic Policy, GSEM, Inequality, Political Stability, Uncertainty