_Figure 9: At-risk of poverty rate (measured via the equivalized income reported in the HBS) and energy poverty rate (low-income-high-cost measure)_ _Figure 10: Overlap of at-risk-of-poverty rate (measured via the equivalized income reported in the HBS) and energy poverty rate (low-income-high-cost measure)_ <!-- Start of picture text --> 30.0 100%<br>25.0 80%<br>25.0<br>71.5<br>60%<br>20.0<br>40%<br>3.5<br>20%<br>15.0 21.4<br>0% 3.6<br>10.0<br>7.1 Neither nor<br>Only energy poor (LIHC)<br>5.0<br>Only monetary poor<br>0.0 Energy (LIHC) and monetary poor<br>At-risk-of poverty Energy poor (LIHC)<br><!-- End of picture text --> _Notes: The at-risk-of-poverty rate is calculated using household income from the 2021 household budget survey and, therefore, does not correspond to the official poverty estimate. The resulting estimate is slightly above the official poverty estimate from the EU-SILC (22.9% in the 2022 survey year and 2021 income reference year). A household is considered energy-poor if two conditions are met: 1) if they have an energy expenditure above the national median, and 2) if the remaining income after they spend that amount (in equivalized terms) is below the official at-risk-of-poverty threshold. By the definition of the LIHC, all monetary income poor are also energy-poor if they have energy spending shares above the national median._ _Source: Own estimates based on HBS (2021)._

**The overlap between energy and monetary poverty varies considerably between the different**

**measures.** By construction, all monetary poor are energy poor in the low-income-high-costs (LIHC) measure only if they have energy spending above the national median<sup>37</sup> (see Figure 10). An additional share of vulnerable households falls below the threshold (AROP poverty line) when subtracting their household energy expenditure from their available household income. Still, some have energy spending shares below the national median, so these households remain unaffected by energy poverty. The P10 measure highlights the most significant intersection between households facing energy and monetary challenges. Specifically, it reveals that 20% of all Bulgarian households experience both energy and monetary poverty. Additionally, a striking 80% of those classified as income poor also fall into the category of energy poverty. The overlap is significantly lower among other measures. For example, only 14.3% of income poor households are also energy poor under the LIHC measure. The overlap between the different measures and at-risk of poverty rates only varies slightly when using income or expenditure as the denominator (compare Figures 11 and 12)<sup>38</sup> . The limited overlap in the LIHC, the 2M, and M/2 measures means that policies targeting the energy poor

> 37 Households are considered poor when their income falls below the AROP poverty line. The at-risk-of-poverty threshold is set at 60 % of the national median equivalized disposable income after social transfers. Household members are made equivalent by weighting each according to their age, using the so-called modified OECD equivalence scale. Therefore, when subtracting energy expenditures from their income, the remaining income will always fall below the AROP poverty line for these households that have energy spending above the median (condition 2).

> 38 Note that the M/2 measures are the same in both figures, as they, by definition, do not rely on the denominator.

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