Targeted cash transfers vs universal price subsidies: policy persistence and cost-effectiveness in EU energy poverty (2015–2024)

Purpose This study compares the effectiveness of targeted cash transfers and universal price subsidies in reducing energy poverty across the EU-27 (2015–2024). It evaluates impacts on household energy affordability, persistence of outcomes, and cost-effectiveness under high energy burden and market volatility. Design/methodology/approach We construct a country-year panel and estimate multi-period difference-in-differences models with staggered adoption. Outcomes use a sign-reversed, country-standardized EU-SILC indicator (“unable to keep home adequately warm”), where higher values denote improvement. Event-time dynamics, mediation (price pass-through), and heterogeneity across burden levels are examined. Findings Average treatment effects are imprecise; however, event-time profiles indicate more persistent improvements following targeted transfers. Mediation results show limited retail price pass-through, consistent with preserved price signals. Heterogeneity analyses reveal stronger gains in high-burden contexts under targeting, while universal subsidies display less stable and less durable effects. Persistence-adjusted cost-effectiveness favors targeted transfers. Originality/value This paper provides the first EU-wide, decade-long comparison of targeted versus universal energy poverty policies, integrating persistence-adjusted cost-effectiveness with mediation and distributional analyses, and supports a “cash-first” policy orientation.