IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v94y2021ics0140988320303157.html
   My bibliography  Save this article

Flickering lifelines: Electrification and household welfare in India

Author

Listed:
  • Sedai, Ashish Kumar
  • Nepal, Rabindra
  • Jamasb, Tooraj

Abstract

This study moves beyond counting electrified households as the policy consensus on electrification and examines the effect of reliability of electricity on household's welfare in India. We analyse two household surveys covering the period from 2005 to 2018, and examine the effect of additional hours of electricity using panel fixed effects instrumental variables regressions. We focus on the intensive margins of deficiency, i.e. how additional hours of electricity in a day affects household's consumption expenditure, income, amenities, assets, borrowing and the status of poverty among others. Results show significant effects of an additional hour of electricity overall, especially among the poor households in rural India. The findings are robust to alternative ways of measuring household income, the use of alternative datasets to measure the effects on reliable electrification, as well as other robustness checks. The study recommends progressive pricing with targeted subsidies for the electrified households to increase household welfare while reducing the financial losses of the State Electricity Boards.

Suggested Citation

  • Sedai, Ashish Kumar & Nepal, Rabindra & Jamasb, Tooraj, 2021. "Flickering lifelines: Electrification and household welfare in India," Energy Economics, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:eneeco:v:94:y:2021:i:c:s0140988320303157
    DOI: 10.1016/j.eneco.2020.104975
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988320303157
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2020.104975?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Shahidur R. Khandker, Hussain A. Samad, Rubaba Ali, and Douglas F. Barnes, 2014. "Who Benefits Most from Rural Electrification? Evidence in India," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    2. Abbas, Faisal & Choudhury, Nirmalya, 2013. "Electricity consumption-economic growth Nexus: An aggregated and disaggregated causality analysis in India and Pakistan," Journal of Policy Modeling, Elsevier, vol. 35(4), pages 538-553.
    3. Chakravorty, Ujjayant & Pelli, Martino & Ural Marchand, Beyza, 2014. "Does the quality of electricity matter? Evidence from rural India," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 228-247.
    4. Chindarkar, Namrata & Goyal, Nihit, 2019. "One price doesn't fit all: An examination of heterogeneity in price elasticity of residential electricity in India," Energy Economics, Elsevier, vol. 81(C), pages 765-778.
    5. C.P. Chandrasekhar & Jayati Ghosh, 2018. "The Financialization of Finance? Demonetization and the Dubious Push to Cashlessness in India," Development and Change, International Institute of Social Studies, vol. 49(2), pages 420-436, March.
    6. Michaël Aklin & Chao-yo Cheng & Johannes Urpelainen & Karthik Ganesan & Abhishek Jain, 2016. "Factors affecting household satisfaction with electricity supply in rural India," Nature Energy, Nature, vol. 1(11), pages 1-6, November.
    7. Ferguson, Ross & Wilkinson, William & Hill, Robert, 2000. "Electricity use and economic development," Energy Policy, Elsevier, vol. 28(13), pages 923-934, November.
    8. Robin Burgess & Michael Greenstone & Nicholas Ryan & Anant Sudarshan, 2020. "The Consequences of Treating Electricity as a Right," Journal of Economic Perspectives, American Economic Association, vol. 34(1), pages 145-169, Winter.
    9. Bose, Ranjan Kumar & Shukla, Megha, 1999. "Elasticities of electricity demand in India," Energy Policy, Elsevier, vol. 27(3), pages 137-146, March.
    10. Rathi, Sambhu Singh & Vermaak, Claire, 2018. "Rural electrification, gender and the labor market: A cross-country study of India and South Africa," World Development, Elsevier, vol. 109(C), pages 346-359.
    11. Nouni, M.R. & Mullick, S.C. & Kandpal, T.C., 2008. "Providing electricity access to remote areas in India: An approach towards identifying potential areas for decentralized electricity supply," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(5), pages 1187-1220, June.
    12. Harish, Santosh M. & Morgan, Granger M. & Subrahmanian, Eswaran, 2014. "When does unreliable grid supply become unacceptable policy? Costs of power supply and outages in rural India," Energy Policy, Elsevier, vol. 68(C), pages 158-169.
    13. Dang, Duc Anh & La, Hai Anh, 2019. "Does electricity reliability matter? Evidence from rural Viet Nam," Energy Policy, Elsevier, vol. 131(C), pages 399-409.
    14. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    15. Jie Bai & Seema Jayachandran & Edmund J Malesky & Benjamin A Olken, 2019. "Firm Growth and Corruption: Empirical Evidence from Vietnam," The Economic Journal, Royal Economic Society, vol. 129(618), pages 651-677.
    16. Ghosh, Sajal, 2002. "Electricity consumption and economic growth in India," Energy Policy, Elsevier, vol. 30(2), pages 125-129, January.
    17. Joseph, Kelli L., 2010. "The politics of power: Electricity reform in India," Energy Policy, Elsevier, vol. 38(1), pages 503-511, January.
    18. Rao, Narasimha D., 2013. "Does (better) electricity supply increase household enterprise income in India?," Energy Policy, Elsevier, vol. 57(C), pages 532-541.
    19. William Greene, 2002. "The Behavior of the Fixed Effects Estimator in Nonlinear Models," Working Papers 02-05, New York University, Leonard N. Stern School of Business, Department of Economics.
    20. Robin Burgess & Michael Greenstone & Nicholas Ryan & Anant Sudarshan, 2020. "The Consequences of Treating Electricity as a Right," Journal of Economic Perspectives, American Economic Association, vol. 34(1), pages 145-169, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sedai, Ashish Kumar, 2021. "Who Benefits from Piped Water in the House? Empirical Evidence from a Gendered Analysis in India," ADBI Working Papers 1273, Asian Development Bank Institute.
    2. Han, Jiashi & Zhang, Lei & Li, Yang, 2022. "Spatiotemporal analysis of rural energy transition and upgrading in developing countries: The case of China," Applied Energy, Elsevier, vol. 307(C).
    3. Zaman, Rafia & Das, Debasish Kumar & van Vliet, Oscar & Posch, Alfred, 2021. "Distributional inequality in market-based solar home system programs: Evidence from rural Bangladesh," Energy Economics, Elsevier, vol. 103(C).
    4. Sedai, Ashish Kumar & Jamasb, Tooraj & Nepal, Rabindra & Miller, Ray, 2021. "Electrification and welfare for the marginalized: Evidence from India," Energy Economics, Elsevier, vol. 102(C).
    5. Bajo-Buenestado, Raúl, 2021. "The effect of blackouts on household electrification status: Evidence from Kenya," Energy Economics, Elsevier, vol. 94(C).
    6. Small, Sarah F. & van der Meulen Rodgers, Yana, 2023. "The gendered effects of investing in physical and social infrastructure," World Development, Elsevier, vol. 171(C).
    7. Su, Qinghe & Azam, Mehtabul, 2023. "Does access to liquefied petroleum gas (LPG) reduce the household burden of women? Evidence from India," Energy Economics, Elsevier, vol. 119(C).
    8. Maruejols, Lucie & Höschle, Lisa & Yu, Xiaohua, 2022. "Vietnam between economic growth and ethnic divergence: A LASSO examination of income-mediated energy consumption," Energy Economics, Elsevier, vol. 114(C).
    9. Sedai, Ashish Kumar & Vasudevan, Ramaa & Pena, Anita Alves & Miller, Ray, 2021. "Does reliable electrification reduce gender differences? Evidence from India," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 580-601.
    10. Pushkar Maitra & Sandip Mitra & Dilip Mookherjee & Sujata Visaria, 2023. "Economic Policies vs. Identity Politics: The Rise of a Right-wing Nationalist Party in India," HKUST CEP Working Papers Series 202301, HKUST Center for Economic Policy.
    11. Abbas, Khizar & Xie, Xiaoqing & Xu, Deyi & Butt, Khalid Manzoor, 2021. "Assessing an empirical relationship between energy poverty and domestic health issues: A multidimensional approach," Energy, Elsevier, vol. 221(C).
    12. Maitra, Pushkar & Miller, Ray & Sedai, Ashish, 2023. "Household welfare effects of ROSCAs," World Development, Elsevier, vol. 169(C).
    13. Pushkar Maitra & Ray Miller & Ashish Sedai, 2022. "Household Welfare Effects of ROSCAs," Monash Economics Working Papers 2022-14, Monash University, Department of Economics.
    14. Karmaker, Shamal Chandra & Sen, Kanchan Kumar & Singha, Bipasha & Hosan, Shahadat & Chapman, Andrew J. & Saha, Bidyut Baran, 2022. "The mediating effect of energy poverty on child development: Empirical evidence from energy poor countries," Energy, Elsevier, vol. 243(C).
    15. Aweke, Abinet Tilahun & Navrud, Ståle, 2022. "Valuing energy poverty costs: Household welfare loss from electricity blackouts in developing countries," Energy Economics, Elsevier, vol. 109(C).
    16. Nepal, Rabindra & Phoumin, Han & Musibau, Hammed & Jamasb, Tooraj, 2022. "The socio-economic impacts of energy policy reform through the lens of the power sector – Does cross-sectional dependence matter?," Energy Policy, Elsevier, vol. 167(C).
    17. Sedai, Ashish Kumar & Vasudevan, Ramaa & Alves Pena, Anita, 2021. "Friends and benefits? Endogenous rotating savings and credit associations as alternative for women’s empowerment in India," World Development, Elsevier, vol. 145(C).
    18. Su, Qinghe & Azam, Mehtabul, 2022. "Does Access to Liquefied Petroleum Gas (LPG) Reduce Women Household Burden? Evidence from India," IZA Discussion Papers 15842, Institute of Labor Economics (IZA).
    19. Akter, Sonia & Mathew, Nikhitha Mary & Fila, Marian Edward, 2023. "The impact of an improvement in the quality and reliability of rural residential electricity supply on clean cooking fuel adoption: Evidence from six energy poor Indian states," World Development, Elsevier, vol. 172(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sedai, Ashish Kumar & Jamasb, Tooraj & Nepal, Rabindra & Miller, Ray, 2021. "Electrification and welfare for the marginalized: Evidence from India," Energy Economics, Elsevier, vol. 102(C).
    2. Sedai, Ashish Kumar & Vasudevan, Ramaa & Pena, Anita Alves & Miller, Ray, 2021. "Does reliable electrification reduce gender differences? Evidence from India," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 580-601.
    3. Bajo-Buenestado, Raúl, 2021. "The effect of blackouts on household electrification status: Evidence from Kenya," Energy Economics, Elsevier, vol. 94(C).
    4. Ashish Kumar Sedai, Rabindra Nepal, and Tooraj Jamasb, 2022. "Electrification and Socio-Economic Empowerment of Women in India," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2).
    5. Richard S. J. Tol, 2023. "Navigating the energy trilemma during geopolitical and environmental crises," Papers 2301.07671, arXiv.org.
    6. Sedai, Ashish Kumar, 2021. "Who Benefits from Piped Water in the House? Empirical Evidence from a Gendered Analysis in India," ADBI Working Papers 1273, Asian Development Bank Institute.
    7. Kennedy, Ryan & Mahajan, Aseem & Urpelainen, Johannes, 2019. "Quality of service predicts willingness to pay for household electricity connections in rural India," Energy Policy, Elsevier, vol. 129(C), pages 319-326.
    8. Mudassir Zaman & Farzana Shaheen & Azad Haider & Sadia Qamar, 2015. "Examining Relationship between Electricity Consumption and its Major Determinants in Pakistan," International Journal of Energy Economics and Policy, Econjournals, vol. 5(4), pages 998-1009.
    9. Gupta, Ridhima & Pelli, Martino, 2021. "Electrification and cooking fuel choice in rural India," World Development, Elsevier, vol. 146(C).
    10. Duncan Chaplin & Arif Mamun & Ali Protik & John Schurrer & Divya Vohra & Kristine Bos & Hannah Burak & Laura Meyer & Anca Dumitrescu & Christopher Ksoll & Thomas Cook, "undated". "Grid Electricity Expansion in Tanzania by MCC: Findings from a Rigorous Impact Evaluation, Final Report," Mathematica Policy Research Reports 144768f69008442e96369195e, Mathematica Policy Research.
    11. Xiao, Han & Zheng, Xinye & Xie, Lunyu, 2022. "Promoting pro-poor growth through infrastructure investment: Evidence from the Targeted Poverty Alleviation program in China," China Economic Review, Elsevier, vol. 71(C).
    12. Kennedy, Ryan & Mahajan, Aseem & Urpelainen, Johannes, 2020. "Crowdsourcing data on the reliability of electricity service: Evidence from a telephone survey in Uttar Pradesh, India," Energy Policy, Elsevier, vol. 145(C).
    13. Akter, Sonia & Mathew, Nikhitha Mary & Fila, Marian Edward, 2023. "The impact of an improvement in the quality and reliability of rural residential electricity supply on clean cooking fuel adoption: Evidence from six energy poor Indian states," World Development, Elsevier, vol. 172(C).
    14. Kyophilavong, Phouphet & Shahbaz, Muhammad & Kim, Byoungki & OH, Jeong-Soo, 2017. "A note on the electricity-growth nexus in Lao PDR," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 1251-1260.
    15. Enrico Nano, 2022. "Electrifying Nigeria: the Impact of Rural Access to Electricity on Kids' Schooling," IHEID Working Papers 03-2022, Economics Section, The Graduate Institute of International Studies.
    16. Suryadeepto Nag, 2023. "Does Reliable Electricity Mean Lesser Agricultural Labor Wages? Evidence from Indian Villages," Papers 2309.09178, arXiv.org.
    17. Palit, Debajit & Bandyopadhyay, Kaushik Ranjan, 2016. "Rural electricity access in South Asia: Is grid extension the remedy? A critical review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 1505-1515.
    18. Chhay, Panharoth & Yamazaki, Koji, 2021. "Rural electrification and changes in employment structure in Cambodia," World Development, Elsevier, vol. 137(C).
    19. Panharoth Chhay & Koji YAMAZAKI, 2020. "Rural Electrification and Changes in Employment Structure in Cambodia," GSICS Working Paper Series 36, Graduate School of International Cooperation Studies, Kobe University.
    20. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2014. "Spatial dynamics of electricity usage in India," Policy Research Working Paper Series 7055, The World Bank.

    More about this item

    Keywords

    Reliable electricity; Electrification; Household welfare; Panel fixed effects; Instrumental variables approach;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:94:y:2021:i:c:s0140988320303157. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.