Undermined by rebounds? assessing the role of energy efficiency in alleviating energy poverty in Italy

This paper examines the relationship between household energy efficiency, rebound effects, and energy poverty in Italy, using microdata from the 2023 Italian Household Budget Survey. We employ a two-step approach: first, a stochastic frontier energy demand model is estimated to derive household-level measures of energy efficiency and the direct rebound effect; second, these estimates are incorporated into a logistic regression to assess their association with the probability of experiencing energy poverty. Our results indicate that higher energy efficiency significantly lowers energy expenditures and reduces the likelihood of energy poverty. However, these benefits are partly offset by the rebound effect, whereby households increase energy use after efficiency gains. The analysis also shows that current incentive schemes disproportionately benefit wealthier households, while vulnerable groups remain under-supported. By highlighting the dual role of efficiency gains and rebound dynamics, this study underscores the importance of designing equity-oriented policies that combine efficiency improvements with targeted financial support. These findings contribute to ongoing debates on how to make European energy transition strategies more socially inclusive and effective.