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Does the Quality of Electricity Matter? Evidence from Rural India

  • Ujjayant Chakravorty
  • Martino Pelli
  • Beyza Ural Marchand

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 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.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2013/wp-cesifo-2013-10/cesifo1_wp4457.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4457.

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Date of creation: 2013
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Handle: RePEc:ces:ceswps:_4457
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