Why do the most disadvantaged households pay more for everything?

The phenomenon of the "double penalty of poverty" is highlighted in a recent study published by La Banque Postale, in partnership with the nonprofit Action Tank Entreprise & Pauvreté. 

According to this study, the most disadvantaged households in France face a heavier financial burden in areas such as transportation, housing, and energy, despite having lower incomes. In fact, these households are forced to spend more, on average, on comparable goods and services, despite their lower purchasing power.
 

The data collected reveals that, for the year 2023, the average double penalty is estimated at approximately 700 euros for households in the bottom two deciles of living standards. The vast majority of these additional expenses (90%) are directly or indirectly related to housing, such as rent, energy bills, loans, insurance, and transportation costs. However, for nearly one million French people (or 8% of households in the bottom two deciles of living standards), this double burden can amount to more than 1,500 euros per year.
 

This situation stems from several factors, among which consumption volume plays a crucial role. For example, in the agri-food sector, buying in large quantities generally allows for lower prices, which is not the case for low-income households, who often have to buy in small quantities, thereby increasing their costs.

 Other factors, such as a lack of liquidity, a lack of information, and the geographic location of the housing, also contribute to these inequalities. The lowest-income households, which tend to opt for smaller homes, end up paying up to 13% more per square meter in rent compared to the average. Similarly, homes that are not energy-efficient result in additional expenses of about 13% to ensure a level of comfort equivalent to that of households living in well-insulated homes.
 

The study also identifies existing support mechanisms, such as housing assistance, rent freezes for energy-inefficient housing, and free public transportation in certain metropolitan areas. However, it recommends implementing new measures to address this double burden at its source. These solutions include better support for households, more protective regulations, and the development of support mechanisms to compensate for this unfair situation. The authors emphasize the urgency of taking action, particularly in the context of rising prices, which automatically exacerbates the financial burden faced by the most vulnerable households.