A study on the housing, water and electricity expenditure burden of households in Korea and eight European countries

Abstract

In this article, we analyzed the burden of housing and water and electricity costs in European countries and Korea using the Household Income and Expenditure Survey in Korea and the European Household Budget Survey (HBS). Our analysis found that the burden of housing, water, and electricity costs, as a share of consumption expenditure (11.2%) and of income (6.8%), was lower in Korea than in European countries. On the other hand, the burden was not any lower in Korea when only elderly single-person households were considered. Korea had a lower burden of housing, water, and electricity costs than European countries for all income quintiles. However, in Korea, the jeonse rental system and state-controlled pricing of electricity and water seem to have had a certain impact. On the other hand, European countries have a systematic housing welfare system for the underprivileged, which can be seen as a major factor in lowering the burden of housing and water, and electricity costs. For Korea, additional policy responses are needed as water and electricity costs turned unstable lately due to the increase in monthly rent and the fluctuating raw material prices.