| By: |
Rodríguez-Álvarez, A.;
Orea, L.;
Jamasb, T. |
| Abstract: |
Evidence and conventional wisdom suggest that general poverty has a negative
effect on the well-being of individuals. However, the mechanisms through which
this effect occurs are not well-understood. In this paper we analyse the
effect of general and fuel poverty as well as the social dimension through
peer comparison on the objective and perceived well-being of households. We
develop a novel approach to analyse fuel poverty and well-being based on
consumer theory. Individual preferences are modelled using indifference curves
and a distance function where the preferences of individuals are affected by
their poverty status. We use the survey data from the official Spanish Living
Conditions Survey (SLCS) for 2013 which contains over 16,800 observations on
household members. The results show that both general and fuel poverty
influence the reference indifference curve but that individuals also compare
themselves with their peers. The proposed model also allows us to corroborate
how general and fuel poverty affect well-being and how effective policies can
be designed to improve social welfare. |
| Keywords: |
Distance functions, fuel poverty, general poverty, indifference curve, stochastic frontier analysis, subjective well-being. |
| JEL: |
D12 I32 Q41 |
| Date: |
2016–12–14 |
| URL: |
http://d.repec.org/n?u=RePEc:cam:camdae:1668&r=hap |