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Energy for Growth: Satellite Synthetic Control Evidence from Indonesia

Author

Listed:
  • Klaus Andresen
  • Ursula Müller
  • Hans-Jörg Schmerer

Abstract

This study evaluates the causal impact of Indonesia's Power Transmission Development Project on regional economic development. Employing the Generalized Synthetic Control Method on district-level satellite data, we find a statistically significant increase in economic activity (p=0.033), which translates to a GDP increase of approximately 1.35 percent based on empirically derived nightlight-GDP elasticities. These findings provide rigorous ex-post evidence supporting the economic returns to infrastructure investments in middle-income countries, while demonstrating how satellite imagery combined with quasi-experimental methods can enable credible impact evaluation where traditional data are scarce.

Suggested Citation

  • Klaus Andresen & Ursula Müller & Hans-Jörg Schmerer, 2026. "Energy for Growth: Satellite Synthetic Control Evidence from Indonesia," CESifo Working Paper Series 12502, CESifo.
    • Handle: RePEc:ces:ceswps:_12502
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    Keywords

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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