The impact of income inequality on energy poverty in the European Union

The EU has consistently tackled the challenge of energy poverty (EP) through various legislative and non-legislative measures, particularly in the context of ongoing energy crisis, but it should also support the reduction of income inequality that might accelerate EP. The aim of this study is to evaluate the impact of income inequality on EP and other interconnected indicators in the EU in the period 2005-2023 using method of moments quantile (MMQ) regression and mean group (MG) estimators. The results suggest that income inequality based on Gini index enhances energy poverty, while gender pay gap, economic growth, and urban population reduce it. Foreign direct investment (FDI) and renewable energy consumption (REC) might combat EP only in the long-run. These findings suggest that macroeconomic policies should focus not only on economic growth, but also on addressing income inequalities. Policymakers must prioritize measures to reduce income inequality, such as progressive taxation or targeted social programs.