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Reid Dorsey-Palmateer
''Outsized impacts of residential energy and utility costs on household financial distress''
( 2020, Vol. 40 No.4 )
Using data from the American Housing Survey, this paper finds that for renters with limited financial resources, higher average residential energy and other utility costs increase the likelihood of various measures of financial distress such as utility cutoffs and missed rent payments by substantially more than an equivalently sized increase in rent/mortgage costs or an equivalently sized decrease in household income. These negative effects of energy and utility costs on financial distress are also noticeably more pronounced for renters than for homeowners. These results are consistent with prospective residents not fully incorporating future residential energy and other utility costs into their housing selection process and suggests that utility costs, dollar-for-dollar, play a larger role in household financial distress than has previously been realized.
Keywords: financial distress; energy costs; utility costs
JEL: I3 - Welfare and Poverty: General
Q4 - Energy: General
Manuscript Received : Aug 17 2019 Manuscript Accepted : Nov 18 2020

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