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Does the quality of electricity matter? Evidence from rural India

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  • Chakravorty, Ujjayant
  • Pelli, Martino
  • Ural Marchand, Beyza

Abstract

This paper estimates the returns to household income due to improved access to electricity in rural India. We examine the effect of connecting a household to the grid and of the quality of electricity, defined as hours of daily supply. The analysis is based on two rounds of a representative panel of more than 10,000 households. We use the district-level density of transmission cables as instrument for the electrification status of the household. We find that a grid connection increases non-agricultural incomes of rural households by about 9% during the study period (1994–2005). However, a grid connection and a higher quality of electricity (in terms of fewer outages and more hours per day) increases non-agricultural incomes by about 28.6% in the same period.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:jeborg:v:107:y:2014:i:pa:p:228-247
    DOI: 10.1016/j.jebo.2014.04.011
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    More about this item

    Keywords

    O12; O18; Q48; Electricity supply; Quality; India; Energy and development; Infrastructure;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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