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How Do Electricity Shortages A

Author

Listed:
  • Stephen O'Connell

    (The Graduate Center, CUNY)

  • Allan Collard-Wexler

    (Duke University)

  • Hunt Allcott

    (NYU)

Abstract

Endemic blackouts are a particularly salient example of how poor infrastructure might reduce growth in developing economies. We study how electricity shortages affect all Indian manufacturers, using an instrument based on hydroelectricity production and a hybrid Leontief/Cobb-Douglas production function model. Shortages reduce average output by about five percent, but because most inputs can be stored during outages, productivity losses are much smaller. Plants without generators have much larger losses, and because of economies of scale in generator capacity, shortages more severely affect small plants.

Suggested Citation

  • Stephen O'Connell & Allan Collard-Wexler & Hunt Allcott, 2015. "How Do Electricity Shortages A," 2015 Meeting Papers 159, Society for Economic Dynamics.
  • Handle: RePEc:red:sed015:159
    as

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    References listed on IDEAS

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