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

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  • Rao, Narasimha D.

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.

Suggested Citation

  • Rao, Narasimha D., 2013. "Does (better) electricity supply increase household enterprise income in India?," Energy Policy, Elsevier, vol. 57(C), pages 532-541.
  • Handle: RePEc:eee:enepol:v:57:y:2013:i:c:p:532-541
    DOI: 10.1016/j.enpol.2013.02.025
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    Cited by:

    1. Smith, Kirk R. & Sagar, Ambuj, 2014. "Making the clean available: Escaping India’s Chulha Trap," Energy Policy, Elsevier, vol. 75(C), pages 410-414.
    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, vol. 68(C), pages 158-169.
    3. Salmon, Claire & Tanguy, Jeremy, 2016. "Rural Electrification and Household Labor Supply: Evidence from Nigeria," World Development, Elsevier, vol. 82(C), pages 48-68.
    4. repec:eee:juipol:v:45:y:2017:i:c:p:109-117 is not listed on IDEAS
    5. Brahma, Antara & Saikia, Kangkana & Hiloidhari, Moonmoon & Baruah, D.C., 2016. "GIS based planning of a biomethanation power plant in Assam, India," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 596-608.
    6. Kashi, Bahman, 2015. "Risk management and the stated investment costs by independent power producers," Energy Economics, Elsevier, vol. 49(C), pages 660-668.
    7. Bahman Kashi, 2014. "Risk Management and the Stated Capital Costs by Independent Power Producers," Development Discussion Papers 2014-03, JDI Executive Programs.

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