The relationship between income inequality and energy poverty in the context of sustainable development goals: A micro-instrumental variables estimation in Türkiye

Energy poverty has adverse consequences on individuals’ lives. It endangers their health, interrupts their education, and may even undermine equality both within and between them. Since income inequality remains a significant problem on the path to achieving sustainable development in Türkiye, identifying its determinants on a micro scale is of great importance. In this regard, this study analysed the relationship of energy poverty to personal income inequality in Türkiye, utilising the TurkStat 2017-2020 income and living conditions survey micro-panel dataset. Instrumental variables estimation was used, and robustness checks were applied to achieve this aim. According to this, energy poverty is negatively related to personal income inequality. To check for heterogeneity, this relationship was re-examined within three income groups. The findings suggested that while energy poverty is positively related to personal income inequality at the bottom of the income distribution, it is negatively related to personal income inequality at the top of the income distribution. This study mainly contributes to the literature by providing the first micro-level evidence on the relationship between income inequality and energy poverty. A combination of targeted social and energy policies is required to tackle both energy poverty and income inequality on the micro scale in Türkiye.