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

Author

Listed:
  • 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)

Suggested Citation

  • Molly Lipscomb & A. Mushfiq Mobarak & Tania Barham, 2013. "Development Effects of Electrification: Evidence from the Topographic Placement of Hydropower Plants in Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 5(2), pages 200-231, April.
    • 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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    References listed on IDEAS

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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. Guy Michaels, 2008. "The Effect of Trade on the Demand for Skill: Evidence from the Interstate Highway System," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 683-701, November.
    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. 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).
    5. Cadot, Olivier & Roller, Lars-Hendrik & Stephan, Andreas, 2006. "Contribution to productivity or pork barrel? The two faces of infrastructure investment," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1133-1153, August.
    6. Barnes,Douglas French & Khandker,Shahidur R. & Nguyen,Minh Huu & Samad,Hussain A., 2009. "Welfare impacts of rural electrification : evidence from Vietnam," Policy Research Working Paper Series 5057, The World Bank.
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    More about this item

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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