The Nexus between Energy, Housing Prices and the Income: An Empirical Evidence from Saudi Arabia

This paper explores the critical interconnections among energy, housing prices and income in Saudi Arabia’s dynamic economic landscape. We analyze comprehensive data from the Saudi Arabia’s Household Income, Expenditure and Consumption Survey using an advanced statistical approach, specifically an ordered probit multinomial model. This methodology deciphers the complex effects of varying housing and energy across different income groups. This paper uniquely extends Hills’ Low-Income High Cost (LIHC) framework by jointly assessing housing and energy costs, offering a novel multivariate probit technique to capture multidimensional fuel poverty in an emerging economy framework. Our findings highlight that a significant portion of the population, approximately 15.75%, is grappling with the triple challenge of steep housing costs, high fuel consumption and low income. In contrast, a smaller segment, about 5.54%, faces the dual issue of high energy usage and low income but benefits from more affordable housing. These findings provide actionable information for policymakers and contribute new empirical evidence to the energy poverty literature. These insights underscore the multifaceted nature of energy and the necessity for nuanced policy measures that address housing and energy concerns. This study contributes to the academic discourse by providing a nuanced analysis of how combined housing and energy costs impact energy levels in Saudi Arabia, offering a unique perspective that broadens the current understanding of the dynamics of energy.