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The Effect of Electrification on Socioeconomic Well-Being and Environmental Outcomes: Evidence for the Lao People’s Democratic Republic

Author

Listed:
  • Sousa, Ricardo

    (University of Minho)

  • Kyophilavong, Phouphet

    (National University of Laos)

  • Abdullah-Al-Baki, Chowdhury

    (Linköping University)

  • Uddin, Gazi Salah

    (Linköping University)

  • Park, Donghyun

    (Asian Development Bank)

Abstract

We investigate the impact of electrification on the economic, educational, and environmental outcomes of the Lao People’s Democratic Republic (Lao PDR). We use household-level data and a novel identification scheme, whereby we instrument the electrification status with the proportion of grid-connected households in a community. We find evidence consistent with the so-called “peer pressure for technology adoption,” as a higher proportion of electrified households is linked with a boost in the electrification of neighboring households. Additionally, we find that electrification: (i) significantly increases income (in particular, farm income); (ii) improves children's educational completion; and (iii) reduces the use of dirty fuel for lighting and cooking. From a policy perspective, public investments and financial incentives for electricity generation and distribution can play a key role in alleviating the existing economic, educational, and environmental bottlenecks of developing countries like the Lao PDR.

Suggested Citation

  • Sousa, Ricardo & Kyophilavong, Phouphet & Abdullah-Al-Baki, Chowdhury & Uddin, Gazi Salah & Park, Donghyun, 2023. "The Effect of Electrification on Socioeconomic Well-Being and Environmental Outcomes: Evidence for the Lao People’s Democratic Republic," ADB Economics Working Paper Series 705, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0705
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    More about this item

    Keywords

    electrification; household; fuel; income; education; Lao People’s Democratic Republic;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q49 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Other

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