Energy Poverty and Health Expenditure: Empirical Evidence from Vietnam

Abstract

Utilizing data from the 2016 Vietnam Household Living Standard Survey, we undertake an empirical investigation into the influence of energy poverty on the health expenditure of Vietnamese households. Employing a double-hurdle model, our empirical findings reveal a negative relationship between energy poverty and health expenditure. Specifically, our results indicate that for each incremental unit increase in energy poverty, there is a substantial reduction of 42.5 percentage points in the overall health expenditure of the households. Furthermore, as energy poverty deepens, we observe declines of 24.6 percentage points and 45.5 percentage points in the expenses incurred for inpatient/outpatient care and self-treatment, respectively. To validate the robustness of our results, we conduct several sensitivity analyses, including propensity score matching, double/debiased machine learning. Across all these methods, our findings consistently underscore the significant and persistent adverse impact of energy poverty on the examined outcome variables. Additionally, to examine the underlying pathways, we conduct a structural equation modeling analysis and find that the relationship between energy poverty and health expenses is mediated by household hospitalization and expenditures on essential items, such as food and daily necessities.