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Development Effects of Electrification: Evidence from the Topographic Placement of Hydropower Plants in Brazil

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  • Molly Lipscomb
  • A. Mushfiq Mobarak
  • Tania Barham

Abstract

We estimate the development effects of electrification across Brazil over the period 1960-2000. We simulate a time series of hypothetical electricity grids for Brazil for the period 1960-2000 that show how the grid would have evolved had infrastructure investments been made based solely on geography-based cost considerations. Using the model as an instrument, we document large positive effects of electrification on development that are underestimated when one fails to account for endogenous targeting. Broad-based improvement in labor productivity across sectors and regions rather than general equilibrium re-sorting appears to be the likely mechanism by which these development gains are realized. (JEL H54, L94, O11, O13, Q41, Q43)

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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Applied Economics.

Volume (Year): 5 (2013)
Issue (Month): 2 (April)
Pages: 200-231

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Handle: RePEc:aea:aejapp:v:5:y:2013:i:2:p:200-231

Note: DOI: 10.1257/app.5.2.200
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  1. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
  2. Michaels, Guy, 2007. "The Effect of Trade on the Demand for Skill - Evidence from the Interstate Highway System," CEPR Discussion Papers 6056, C.E.P.R. Discussion Papers.
  3. Morrison, Catherine J & Schwartz, Amy Ellen, 1996. "State Infrastructure and Productive Performance," American Economic Review, American Economic Association, vol. 86(5), pages 1095-1111, December.
  4. Olivier Cadot & Lars-Hendrik Röller & Andreas Stephan, 2004. "Contribution to Productivity or Pork Barrel?: The Two Faces of Infrastructure Investment," Discussion Papers of DIW Berlin 458, DIW Berlin, German Institute for Economic Research.
  5. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2002. "Growth, inequality, and poverty in rural China: the role of public investments," Research reports 125, International Food Policy Research Institute (IFPRI).
  6. Khandker, Shahidur R. & Barnes, Douglas F. & Samad, Hussain & Minh, Nguyen Huu, 2009. "Welfare impacts of rural electrification : evidence from Vietnam," Policy Research Working Paper Series 5057, The World Bank.
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Cited by:
  1. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779 Elsevier.
  2. Ujjayant Chakravorty & Martino Pelli & Beyza Ural Marchand, 2013. "Does the Quality of Electricity Matter? Evidence from Rural India," Cahiers de recherche 13-05, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke.
  3. Thor Berger & Kerstin Enflo, 2013. "Locomotives of Local Growth: The Short- and Long-Term Impact of Railroads in Sweden," Working Papers 0042, European Historical Economics Society (EHES).
  4. Hunt Allcott & Allan Collard-Wexler & Stephen D. O'Connell, 2014. "How Do Electricity Shortages Affect Productivity? Evidence from India," NBER Working Papers 19977, National Bureau of Economic Research, Inc.
  5. Grimm, Michael & Sparrow, Robert & Tasciotti, Luca, 2014. "Does Electrification Spur the Fertility Transition? Evidence from Indonesia," IZA Discussion Papers 8146, Institute for the Study of Labor (IZA).
  6. Michael Greenstone & B. Kelsey Jack, 2013. "Envirodevonomics: A Research Agenda for a Young Field," NBER Working Papers 19426, National Bureau of Economic Research, Inc.

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