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Does the Quality of Electricity Matter? Evidence from Rural India

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

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 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 percent 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 percent in the same period.

Suggested Citation

  • Chakravorty, Ujjayant & Pelli, Martino & Marchand, Beyza Ural, 2014. "Does the Quality of Electricity Matter? Evidence from Rural India," Energy: Resources and Markets 163722, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemer:163722
    DOI: 10.22004/ag.econ.163722
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    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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