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The Welfare Impacts of Rural Electrification in Bangladesh

Shahidur R. Khandker, Douglas F. Barnes, and Hussain A. Samad

Year: 2012
Volume: Volume 33
Number: Number 1
DOI: 10.5547/ISSN0195-6574-EJ-Vol33-No1-7
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Abstract:
Lack of access to electricity has been considered a major impediment to the growth and development of rural economies. Thus, the provision of electricity and other forms of modern energy has been a priority for many development organizations, including the World Bank. However, few impact studies of electrification have taken the endogeneity of the grid connection into account. Using a cross-sectional survey conducted in 2005 of 20,900 rural households in Bangladesh, this paper examines the welfare impacts of household access to grid electricity after controlling for endogeneity bias. The econometric analysis shows that grid electrification has significant positive impacts on household income, expenditure, and education. The household gain in total income due to electrification is as high as 21 percent, with a 1.5 percentage point reduction in poverty per year. The results also suggest that the income and expenditure effects of electricity connection are higher for better-off households. Keywords: Rural electrification, Electrification impacts, Distributional impacts, Bangladesh



Who Benefits Most from Rural Electrification? Evidence in India

Shahidur R. Khandker, Hussain A. Samad, Rubaba Ali, and Douglas F. Barnes

Year: 2014
Volume: Volume 35
Number: Number 2
DOI: 10.5547/01956574.35.2.4
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Abstract:
This paper applies an econometric analysis to estimate the average and distribution benefits of rural electrification using rich household survey data from India. The results support that rural electrification helps reduce time allocated to fuel wood collection by household members and increases time allocated to studying by boys and girls. Rural electrification also increases labor supply of men and women, schooling of boys and girls, household per capita income and expenditure. Electrification also helps reduce poverty. But the larger share of benefits accrues to wealthier rural households, with poorer ones having a more limited use of electricity. The analysis also shows that restricted supply of electricity, due to frequent power outages, negatively affects both household electricity connection and its consumption, thereby reducing the expected benefits of rural electrification. Keywords: Rural electrification, Electrification impacts, Distributional impacts, India





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