How energy poverty shapes investment in financial assets? Evidence from Chinese households

Energy poverty (EP) is widely recognized as a constraint on household welfare, yet its implications for household financial investment remain underexplored. Using five waves of nationally representative Chinese panel data, we examine how EP affects financial market participation and risky-asset allocation. The results show that EP lowers financial market participation and the risky-asset portfolio share by 1.64 and 0.72 percentage points, respectively. Instrumental-variable estimates and a series of robustness checks confirm the negative relationship. Mechanism analysis suggests that energy poverty can lower financial market participation through reducing liquidity buffers and tightening borrowing constraints. Supplementary analyses further show that EP is negatively associated with individual health, cognition, and subjective economic status. Overall, our findings suggest that improving energy affordability may strengthen household financial resilience and support financial market participation.