The seminar is based on a work co-authored by Ivan Faiella and Luciano Lavecchia, Bank of Italy.

Over the last 15 years, Italian households have experienced a remarkable increase in gas and electricity prices (+80% and + 60% respectively). As a consequence, the share of heating and electricity costs on total expenditure has reached its historical height of almost 6% (an increase of about 1 percentage point in the last decade). The situation has been more severe for less affluent households: over the same period the energy bill paid by the households in the first fourth of expenditure distribution has risen from 7% to 8.4%.

In this paper we investigate whether these dynamics are leading to a problem of energy poverty (EP). Despite the existence of two targeted national programs (“Bonus gas” and “Bonus energia”) in Italy there is no official definition of EP and the purpose of this study is to provide the reader with a set of indicators to fill this gap.

We present a range of survey-based poverty measures (relative, absolute and subjective) that estimates that a share  between 5% to 20% of households was in EP in 2012. A selection on the basis of qualitative criteria (information conveyed, quality of estimator and of survey data, etc.) suggests the use of a "low-income high costs" indicator corrected to include the economically vulnerable households with no heating expenses. According to this statistic the proportion of households in EP during the period 1997-2012 has remained broadly stable at around 8%. Our simulations indicate that the tools to contrast EP in Italy would have yielded a modest reduction of energy vulnerable households.

This seminar has been jointly organized by FEEM and IEFE, Bocconi University.