Inequality and Household Energy Consumption in Urban Mexico

Landy Sanchez, El Colegio de México

Studies conducted in some developing countries suggest that income distribution improvements have a direct impact on energy consumption levels, particularly when they reflect the rising living standards of the low-income population. Other studies point to the role of middle- and upper-income household in driving increments in energy demand because of their life styles and income levels. It is unclear, however, whether any of these trends are present in Mexico where inequality remains salient at the same time that energy household consumption increased over the last decade. Using 1998 and 2008 household income and expenditure surveys, this paper analyzes trends in the stratification of energy consumption of urban households. In particular, it explores to what extent energy spending follows inequality patterns. It analyzes the determinants of the level of energy households' demand and compares its composition by income strata (low, middle, high) and across time.