Can financial literacy Ease energy poverty? Some Lessons at the household level in China
Miaomiao Tao, Boqiang Lin, Stephen Poletti, Addison Pan
Abstract
Energy poverty and financial literacy are two cross-cutting vital dimensions in sustainable global development. This study examines whether and how financial literacy reduces energy poverty at the household level in China. A two-way fixed regression model demonstrates the catalytic role of financial literacy in eradicating energy poverty. Furthermore, this study identifies potential mechanisms between financial literacy and energy poverty from a mediation and moderation perspective. Financial literacy indirectly and robustly mitigates energy poverty by heightening households' future expectations. However, higher financial risk weakens this facilitating effect on households’ future expectations, as increased financial risk destabilizes household finances. • Financial literacy reduces energy poverty. • Energy poverty is assessed using a multidimensional framework. • Financial literacy is evaluated using a multidimensional framework. • Mechanism analyses are based on the mediation and moderation perspectives.