IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v199y2025ics0301421525000382.html
   My bibliography  Save this article

The effect of access to electricity on rural households of underdeveloped countries: Evidence from Ethiopia

Author

Listed:
  • Gashaye, Amare Terefe
  • Liu, Hongxun
  • Li, Jianglong

Abstract

Recent research underscores the pivotal role of electricity in enhancing socioeconomic well-being of households. However, a substantial gap persists in comprehending its ramifications on households in underdeveloped nations, particularly in rural communities, which have been overlooked compared to urban counterparts. Notably, the association between expenditures on non-electric energy sources and electricity accessibility in underdeveloped rural households remains unexplored. Leveraging microdata from Ethiopia, our study reveals that electricity access diminishes expenses related to alternative energy and healthcare, augments income, education levels, and productivity, notwithstanding a positive correlation between access likelihood and income. These findings provide valuable insights into the effect of electricity on the lives of rural households in underdeveloped economies, particularly concerning their livelihoods and well-being. Our study investigates the link between electricity and expenditures on alternative energy sources, given the limited sample size. By assessing effects of electricity through income, and on income via health, education, and productivity, we elucidate the diverse benefits and limitations of electrification. Our analysis underscores the importance of integrating energy poverty into growth policy agendas and enriches understanding of the nexus between electricity access and household welfare in underdeveloped regions.

Suggested Citation

  • Gashaye, Amare Terefe & Liu, Hongxun & Li, Jianglong, 2025. "The effect of access to electricity on rural households of underdeveloped countries: Evidence from Ethiopia," Energy Policy, Elsevier, vol. 199(C).
    • Handle: RePEc:eee:enepol:v:199:y:2025:i:c:s0301421525000382
    DOI: 10.1016/j.enpol.2025.114531
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421525000382
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2025.114531?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

    for a different version of it.

    References listed on IDEAS

    as
    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. Hassen, Sied & Beyene, Abebe D. & Jeuland, Marc & Mekonnen, Alemu & Meles, Tensay Hadush & Sebsibie, Samuel & Klug, Thomas & Pattanayak, Subhrendu K. & Toman, Michael A., 2022. "Effect of electricity price reform on households’ electricity consumption in urban Ethiopia," Utilities Policy, Elsevier, vol. 79(C).
    3. Igawa, Moegi & Managi, Shunsuke, 2022. "Energy poverty and income inequality: An economic analysis of 37 countries," Applied Energy, Elsevier, vol. 306(PB).
    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. Sedai, Ashish Kumar & Nepal, Rabindra & Jamasb, Tooraj, 2021. "Flickering lifelines: Electrification and household welfare in India," Energy Economics, Elsevier, vol. 94(C).
    6. 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).
    7. 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).
    8. George Akpandjar & Carl Kitchens, 2017. "From Darkness to Light: The Effect of Electrification in Ghana, 2000–2010," Economic Development and Cultural Change, University of Chicago Press, vol. 66(1), pages 31-54.
    9. Dendup, Ngawang, 2022. "Returns to grid electricity on firewood and kerosene: Mechanism," Journal of Environmental Economics and Management, Elsevier, vol. 111(C).
    10. Jerry Hausman, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    11. Meles, Tensay Hadush & Mekonnen, Alemu & Beyene, Abebe D. & Hassen, Sied & Pattanayak, Subhrendu K. & Sebsibie, Samuel & Klug, Thomas & Jeuland, Marc, 2021. "Households' valuation of power outages in major cities of Ethiopia: An application of stated preference methods," Energy Economics, Elsevier, vol. 102(C).
    12. Fujii, Tomoki & Shonchoy, Abu S., 2020. "Fertility and rural electrification in Bangladesh," Journal of Development Economics, Elsevier, vol. 143(C).
    13. Wassie, Yibeltal T. & Rannestad, Meley M. & Adaramola, Muyiwa S., 2021. "Determinants of household energy choices in rural sub-Saharan Africa: An example from southern Ethiopia," Energy, Elsevier, vol. 221(C).
    14. Arouna Diallo & Richard Kouame Moussa, 2020. "Does access to electricity affect poverty? Evidence from Côte d'Ivoire," Economics Bulletin, AccessEcon, vol. 40(3), pages 2521-2537.
    15. Kanagawa, Makoto & Nakata, Toshihiko, 2008. "Assessment of access to electricity and the socio-economic impacts in rural areas of developing countries," Energy Policy, Elsevier, vol. 36(6), pages 2016-2029, June.
    16. Fatih Birol, 2007. "Energy Economics: A Place for Energy Poverty in the Agenda?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-6.
    17. Meles, Tensay Hadush, 2020. "Impact of power outages on households in developing countries: Evidence from Ethiopia," Energy Economics, Elsevier, vol. 91(C).
    18. Ahmad, Sohail & Mathai, Manu V. & Parayil, Govindan, 2014. "Household electricity access, availability and human well-being: Evidence from India," Energy Policy, Elsevier, vol. 69(C), pages 308-315.
    19. Ikhsan Ikhsan & Khairul Amri, 2022. "Does electrification affect rural poverty and households’ non-food spending? Empirical evidence from western Indonesia," Cogent Economics & Finance, Taylor & Francis Journals, vol. 10(1), pages 2095768-209, December.
    20. Zhang, Tong & Shi, Xunpeng & Zhang, Dayong & Xiao, Junji, 2019. "Socio-economic development and electricity access in developing economies: A long-run model averaging approach," Energy Policy, Elsevier, vol. 132(C), pages 223-231.
    21. Khandker, Shahidur R. & Barnes, Douglas F. & Samad, Hussain A., 2009. "Welfare impacts of rural electrification : a case study from Bangladesh," Policy Research Working Paper Series 4859, The World Bank.
    22. Magnani, Natalia & Vaona, Andrea, 2016. "Access to electricity and socio-economic characteristics: Panel data evidence at the country level," Energy, Elsevier, vol. 103(C), pages 447-455.
    23. Arouna Diallo & Richard Kouame Moussa, 2020. "Does access to electricity affect poverty? Evidence from Côte d'Ivoire," Post-Print hal-02956563, HAL.
    24. Fatih Birol, 2007. "Energy Economics: A Place for Energy Poverty in the Agenda?," The Energy Journal, , vol. 28(3), pages -6, July.
    25. Bhattacharyya, Subhes C. & Ohiare, Sanusi, 2012. "The Chinese electricity access model for rural electrification: Approach, experience and lessons for others," Energy Policy, Elsevier, vol. 49(C), pages 676-687.
    26. Panu Kalmi & Gianluca Trotta & Andrius Kažukauskas, 2021. "Energy‐related financial literacy and electricity consumption: Survey‐based evidence from Finland," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(3), pages 1062-1089, September.
    27. Sagar, Ambuj D., 2005. "Alleviating energy poverty for the world's poor," Energy Policy, Elsevier, vol. 33(11), pages 1367-1372, July.
    28. Thomas, Daniel Robert & Harish, S.P. & Kennedy, Ryan & Urpelainen, Johannes, 2020. "The effects of rural electrification in India: An instrumental variable approach at the household level," Journal of Development Economics, Elsevier, vol. 146(C).
    Full references (including those not matched with items on IDEAS)

    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. Bhukta, Rikhia & Pakrashi, Debayan & Saha, Sarani & Sedai, Ashish, 2024. "Community electrification and women’s autonomy," Energy Economics, Elsevier, vol. 137(C).
    2. Richard S. J. Tol, 2023. "Navigating the energy trilemma during geopolitical and environmental crises," Papers 2301.07671, arXiv.org.
    3. Thierry Mamadou Asngar, 2022. "Does financial development improve access to electricity in sub-Saharan Africa?," SN Business & Economics, Springer, vol. 2(9), pages 1-18, September.
    4. Subedi, Mukti Nath & Bharadwaj, Bishal & Rafiq, Shuddhasattwa, 2023. "Who benefits from the decentralised energy system (DES)? Evidence from Nepal’s micro-hydropower (MHP)," Energy Economics, Elsevier, vol. 120(C).
    5. Li, Zhen & Niu, Shuwen & Halleck Vega, Sol Maria & Wang, Jinnian & Wang, Dakang & Yang, Xiankun, 2024. "Electrification and residential well-being in China," Energy, Elsevier, vol. 294(C).
    6. 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.
    7. Chroufa, Mohamed Ali & Chtourou, Nouri, 2024. "The impact of income inequality on economic growth in MENA region: The role of energy poverty threshold effect," Energy, Elsevier, vol. 313(C).
    8. Obsa Urgessa Ayana & Jima Degaga, 2022. "Effects of rural electrification on household welfare: a meta-regression analysis," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 69(2), pages 209-261, June.
    9. Ly, Alpha & Chakir, Raja & Creti, Anna, 2024. "Electrification or deforestation? Evidence from household practices in Côte d’Ivoire," Energy Economics, Elsevier, vol. 136(C).
    10. Ssennono, Vincent Fred & Ntayi, Joseph M. & Buyinza, Faisal & Wasswa, Francis & Aarakit, Sylvia Manjeri & Mukiza, Chris Ndatira, 2021. "Energy poverty in Uganda: Evidence from a multidimensional approach," Energy Economics, Elsevier, vol. 101(C).
    11. Mohammad Jahangir Alam & Shinji Kaneko, 2019. "The Effects of Electrification on School Enrollment in Bangladesh: Short- and Long-Run Perspectives," Energies, MDPI, vol. 12(4), pages 1-26, February.
    12. Bigerna, Simona & Choudhary, Piyush & Jain, Nikunj Kumar & Micheli, Silvia & Polinori, Paolo, 2024. "An empirical investigation of the Indian households’ willingness to pay to avoid power outages," Energy Policy, Elsevier, vol. 184(C).
    13. Priya, Pragati & Sharma, Chandan & Jha, Chandan Kumar, 2025. "Asymmetry in the inequality of opportunity in energy consumption across gender, caste, and religion in India," Energy Economics, Elsevier, vol. 141(C).
    14. Bajo-Buenestado, Raúl, 2021. "The effect of blackouts on household electrification status: Evidence from Kenya," Energy Economics, Elsevier, vol. 94(C).
    15. Bridge, Brandon A. & Adhikari, Dadhi & Fontenla, Matías, 2016. "Household-level effects of electricity on income," Energy Economics, Elsevier, vol. 58(C), pages 222-228.
    16. Marcillo-Delgado, J.C. & Ortego, M.I. & Pérez-Foguet, A., 2019. "A compositional approach for modelling SDG7 indicators: Case study applied to electricity access," Renewable and Sustainable Energy Reviews, Elsevier, vol. 107(C), pages 388-398.
    17. Magbondé, Kadoukpè Gildas & Reilly, Barry & Kauma, Bridget, 2024. "The distributional effects of rural electrification on household welfare: Evidence from Senegal," Utilities Policy, Elsevier, vol. 91(C).
    18. 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.
    19. Wang, Yao & Du, Zhili, 2024. "Has energy poverty entangled the households by hindering the filial generation?," Energy Policy, Elsevier, vol. 186(C).
    20. Yang, Yeonbin, 2025. "Does Household Electrification Empower Rural Boys and Girls Alike? Evidence from Brazil," World Development, Elsevier, vol. 186(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    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:enepol:v:199:y:2025:i:c:s0301421525000382. 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/enpol .

    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.