Sweating the energy bill: Extreme weather, poor households, and the energy spending gap

We estimate the relationship between temperature and energy spending for both low and higher-income U.S. households. We find both groups respond similarly (in percentage terms) to moderate temperatures, but low-income households' energy spending is half as responsive to extreme temperatures. Consistent with low-income households cutting back on necessities to afford their energy bills, we find similar disparities in the food spending response to extreme temperature. These results suggest adaptation to extreme weather, such as air conditioning use, is prohibitively costly for households experiencing poverty.

Automated summary

This study estimates the relationship between temperature and energy spending and finds that low-income households are less responsive to extreme temperatures compared to higher-income households. This suggests that low-income households may have to cut back on necessities in order to afford their energy bills.