Beyond the energy ladder: household energy portfolios under weather and price shocks in the Philippines

This paper examines how Philippine households organize their energy use in response to weather and price shocks. It develops a dual-margin framework that distinguishes between the extensive margin of energy portfolio adoption and the intensive margin of energy share allocation. The extensive margin is estimated using a multinomial probit model, while the intensive margin is estimated using a fractional multinomial logit model. Results show that mixed portfolios remain the dominant form of household energy use across income levels, locations, and electricity supply conditions. Weather shocks increase the need for energy services, but affordability and supply constraints determine whether households remain anchored in modern energy or shift towards greater reliance on traditional sources. Electricity serves as a modern energy anchor for high-income, urban, and supply-unconstrained households, while solid fuels serve as a fallback for low-income, rural, and supply-constrained households. The findings suggest that household energy transitions should not be understood as a simple movement up the energy ladder, but rather as adjustments to energy portfolios in response to weather shocks and affordability and supply reliability constraints. Thus, policies should focus on reliable, modern energy access, protection of affordability during weather- and price-related shocks, and differentiated support for vulnerable households.