Spatial tradeoffs in incomes and car fuel, domestic energy, and housing expenditures

Effective and equitable energy policy requires a comprehensive understanding of the spatial and social patterns of household incomes and energy expenditures. Domestic and transport energy costs are higher in rural than in urban areas while housing costs show the opposite pattern. We examine this tradeoff by systematically analyzing 6.2 million households’ observed incomes and car fuel, domestic energy, and housing expenditures for the first time. We determine the marginal effects of sociodemographic and built environment characteristics with a disaggregate econometric modeling framework. Vulnerable groups like disabled and unemployed households, households with children, and single-adult households have the lowest residual budgets and devote the largest share of these budgets to energy carriers, resulting in high vulnerability to energy price shocks. After correcting for these sociodemographic patterns, we find that similar households have lower car fuel expenditures in high-density areas whereas proximity to train stations has a limited effect. Domestic energy costs are lowest for residents of urban apartments and terraced dwellings. Policy may further reduce apartment dwellers’ domestic energy bills by supporting homeowners associations in installing solar panels and heat-pumps. Private rent and mortgage costs are higher in high-density, centrally located areas. These higher urban housing costs outweigh savings on domestic and transport energy if residents cannot obtain social housing. At the same time, households do devote a larger share of their residual budget to energy carriers when living in remote rural areas. We recommend policy aimed at urban social housing, building renovation, and the accessibility of electric vehicles.