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Welfare impacts of rural electrification : a case study from Bangladesh

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

Abstract

Lack of access to electricity is one of the major impediments to growth and development of the rural economies in developing countries. That is why access to modern energy, in particular to electricity, has been one of the priority themes of the World Bank and other development organizations. Using a cross-sectional survey conducted in 2005 of some 20,000 households in rural Bangladesh, this paper studies the welfare impacts of households'grid connectivity. Based on rigorous econometric estimation techniques, this study finds that grid electrification has significant positive impacts on households'income, expenditure, and educational outcomes. For example, the gain in total income due to electrification can be as much as 30 percent and as low as 9 percent. Benefits go up steadily as household exposure to grid electrification (measured by duration) increases and eventually reach a plateau. This paper also finds that rich households benefit more from electrification than poor households. Finally, estimates also show that income benefits of electrification on an average exceed cost by a wide margin.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4859.

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Date of creation: 01 Mar 2009
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Handle: RePEc:wbk:wbrwps:4859

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Keywords: Energy Production and Transportation; Access to Finance; Engineering; Electric Power; Rural Poverty Reduction;

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References

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  1. Van de Ven, Wynand P. M. M. & Van Praag, Bernard M. S., 1981. "The demand for deductibles in private health insurance : A probit model with sample selection," Journal of Econometrics, Elsevier, Elsevier, vol. 17(2), pages 229-252, November.
  2. Keisuke Hirano & Guido W. Imbens & Geert Ridder, 2000. "Efficient Estimation of Average Treatment Effects Using the Estimated Propensity Score," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0251, National Bureau of Economic Research, Inc.
  3. Filmer, Deon & Pritchett, Lant, 1998. "The effect of household wealth on educational attainment : demographic and health survey evidence," Policy Research Working Paper Series, The World Bank 1980, The World Bank.
  4. Khandker, S.R., 1996. "Education Achievements and School Efficiency in Rural Bangladesh," World Bank - Discussion Papers, World Bank 319, World Bank.
  5. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, StataCorp LP, vol. 2(4), pages 358-377, November.
  6. Alam, M.S. & Kabir, E. & Rahman, M.M. & Chowdhury, M.A.K., 2004. "Power sector reform in Bangladesh: Electricity distribution system," Energy, Elsevier, Elsevier, vol. 29(11), pages 1773-1783.
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Cited by:
  1. Gunther Bensch, & Jochen Kluve & Jörg Peters, 2011. "Impacts of Rural Electrifi cation in Rwanda," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0284, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. Ujjayant Chakravorty & Martino Pelli & Beyza Ural Marchand, 2014. "Does the Quality of Electricity Matter? Evidence from Rural India," Working Papers, Fondazione Eni Enrico Mattei 2014.11, Fondazione Eni Enrico Mattei.
  3. Lin, Justin Yifu & Martin, William J., 2009. "The Financial Crisis and Its Impact on the Global Agricultural Landscape," 2009 Conference, August 16-22, 2009, Beijing, China, International Association of Agricultural Economists 53208, International Association of Agricultural Economists.
  4. Bernhard G. Gunter, 2010. "The Impact of Development on CO2 Emissions: A Case Study for Bangladesh until 2050," Bangladesh Development Research Working Paper Series (BDRWPS), Bangladesh Development Research Center (BDRC) BDRWPS No. 10, Bangladesh Development Research Center (BDRC).
  5. Matinga, Margaret Njirambo & Annegarn, Harold J., 2013. "Paradoxical impacts of electricity on life in a rural South African village," Energy Policy, Elsevier, Elsevier, vol. 58(C), pages 295-302.
  6. van de Walle, Dominique & Ravallion, Martin & Mendiratta, Vibhuti & Koolwal, Gayatri, 2013. "Long-term impacts of household electrification in rural India," Policy Research Working Paper Series, The World Bank 6527, The World Bank.
  7. Paul Baringanire & Kabir Malik & Sudeshna Ghosh Banerjee, 2014. "Scaling Up Access to Electricity : The Case of Rwanda," World Bank Other Operational Studies 18680, The World Bank.

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