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Does (better) electricity supply increase household enterprise income in India?

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  • Rao, Narasimha D.
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    Abstract

    Electricity access is an important driver of economic development. Previous studies treat electrification as a binary outcome. In reality, in developing countries households with access face chronic supply interruptions, which can last up to 12h a day. This is the first study to estimate the income differences in urban and rural non-farm enterprises in Indian households with different levels of electricity supply, using a subset of 8125 households in the India Human and Development Survey, a cross-sectional national sample of 41,554 households. I use multiple econometric approaches, including linear regression with an instrument variable and propensity-score matching with multiple treatment levels to represent supply availability. I find a robust income effect of access, and suggestive evidence of the effect of better supply availability. The aggregate income impact across existing NFEs in India of improving supply to 16 h a day could be on the order of 0.1 percent of GDP.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Policy.

    Volume (Year): 57 (2013)
    Issue (Month): C ()
    Pages: 532-541

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    Handle: RePEc:eee:enepol:v:57:y:2013:i:c:p:532-541

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    Web page: http://www.elsevier.com/locate/enpol

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    Keywords: Energy poverty; Electricity reliability; Development;

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    Cited by:
    1. Bahman Kashi, 2014. "Risk Management and the Stated Capital Costs by Independent Power Producers," Development Discussion Papers 2014-03, JDI Executive Programs.
    2. 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, Elsevier, vol. 68(C), pages 158-169.

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