How government expenditure reduces energy poverty? Evidence from spatial quantile model

Abstract

Government expenditure is the core measure of maintaining the welfare of the general public, especially low-income families. Therefore, to investigate the potential effect of government expenditure on energy poverty reduction, this paper first calculates the energy poverty index of 30 provinces in China, and then explore how government expenditure mitigates energy poverty. The estimation results of the spatial quantile model show that: (1) there exists a positive spatial autocorrelation in energy poverty, indicating that energy poor areas are often contiguous, such as Guizhou-Yunnan, and Qinghai-Gansu-Shanxi. (2) Government expenditure has a negative effect on energy poverty across all quantile provinces, meaning that government expenditure is advantageous for alleviating energy poverty. (3) Heterogeneity analysis reveals that both educational expenditure and resource exploration expenditure contribute to the alleviation of energy poverty. However, the impact of social security expenditure on poverty reduction is limited. (4) The mediating role of green technology innovation and green finance is prominent. Specifically, green technology innovation has a positive impact on energy poverty reduction in all quantile groups, while green finance only has a prominent effect on the provinces with lower energy poverty. Following the above results, this article proposes relevant policies to optimize government expenditure structure and reduce energy poverty.