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The Welfare Impacts of Rural Electrification in Bangladesh

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

Abstract

Lack of access to electricity has been considered a major impediment to the growth and development of rural economies. Thus, the provision of electricity and other forms of modern energy has been a priority for many development organizations, including the World Bank. However, few impact studies of electrification have taken the endogeneity of the grid connection into account. Using a cross-sectional survey conducted in 2005 of 20,900 rural households in Bangladesh, this paper examines the welfare impacts of household access to grid electricity after controlling for endogeneity bias. The econometric analysis shows that grid electrification has significant positive impacts on household income, expenditure, and education. The household gain in total income due to electrification is as high as 21 percent, with a 1.5 percentage point reduction in poverty per year. The results also suggest that the income and expenditure effects of electricity connection are higher for better-off households.

Suggested Citation

  • Shahidur R. Khandker, Douglas F. Barnes, and Hussain A. Samad, 2012. "The Welfare Impacts of Rural Electrification in Bangladesh," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
  • Handle: RePEc:aen:journl:33-1-a07
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    References listed on IDEAS

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    1. repec:pri:rpdevs:dinkelman_electricity_0810 is not listed on IDEAS
    2. Markus Frölich & Blaise Melly, 2013. "Unconditional Quantile Treatment Effects Under Endogeneity," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 31(3), pages 346-357, July.
    3. Alam, M.S. & Kabir, E. & Rahman, M.M. & Chowdhury, M.A.K., 2004. "Power sector reform in Bangladesh: Electricity distribution system," Energy, Elsevier, vol. 29(11), pages 1773-1783.
    4. Taryn Dinkelman, 2010. "The E ects of Rural Electri cation on Employment: New Evidence from South Africa," Working Papers 1255, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
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    Citations

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    Cited by:

    1. Bridge, Brandon A. & Adhikari, Dadhi & Fontenla, Matías, 2016. "Household-level effects of electricity on income," Energy Economics, Elsevier, vol. 58(C), pages 222-228.
    2. 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.
    3. Manning, Dale T. & Means, Peter & Zimmerle, Daniel & Galvin, Kathleen & Loomis, John & Paustian, Keith, 2015. "Using contingent behavior analysis to measure benefits from rural electrification in developing countries: an example from Rwanda," Energy Policy, Elsevier, vol. 86(C), pages 393-401.
    4. 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).
    5. Sudeshna Ghosh Banerjee & Douglas Barnes & Bipul Singh & Kristy Mayer & Hussain Samad, 2015. "Power for All : Electricity Access Challenge in India," World Bank Publications, The World Bank, number 20525, July.
    6. Lenz, Luciane & Munyehirwe, Anicet & Peters, Jörg & Sievert, Maximiliane, 2017. "Does Large-Scale Infrastructure Investment Alleviate Poverty? Impacts of Rwanda’s Electricity Access Roll-Out Program," World Development, Elsevier, vol. 89(C), pages 88-110.
    7. Santosh Kumar & Ganesh Rauniyar, 2018. "The Impact of Rural Electrification on Income and Education: Evidence from Bhutan," Working Papers 1801, Sam Houston State University, Department of Economics and International Business.
    8. Tooraj Jamasb & Rabindra Nepal & Govinda Timilsina & Michael Toman, 2014. "Energy Sector Reform, Economic Efficiency and Poverty Reduction," Discussion Papers Series 529, School of Economics, University of Queensland, Australia.
    9. Kudo, Yuya & Shonchoy, Abu S. & Takahashi, Kazushi, 2015. "Impacts of solar lanterns in geographically challenged locations : experimental evidence from Bangladesh," IDE Discussion Papers 502, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    10. repec:aen:journl:ej38-3-jamasb is not listed on IDEAS
    11. repec:gam:jsusta:v:10:y:2018:i:3:p:815-:d:136322 is not listed on IDEAS
    12. Jamasb,Tooraj & Nepal,Rabindra & Timilsina,Govinda R., 2015. "A quarter century effort yet to come of age : a survey of power sector reforms in developing countries," Policy Research Working Paper Series 7330, The World Bank.

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    JEL classification:

    • F0 - International Economics - - General

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