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Welfare impacts of rural electrification : a case study from Bangladesh

Author

Listed:
  • Khandker, Shahidur R.
  • Barnes, Douglas F.
  • Samad, Hussain A.

Abstract

Lack of access to electricity is one of the major impediments to growth and development of the rural economies in developing countries. That is why access to modern energy, in particular to electricity, has been one of the priority themes of the World Bank and other development organizations. Using a cross-sectional survey conducted in 2005 of some 20,000 households in rural Bangladesh, this paper studies the welfare impacts of households'grid connectivity. Based on rigorous econometric estimation techniques, this study finds that grid electrification has significant positive impacts on households'income, expenditure, and educational outcomes. For example, the gain in total income due to electrification can be as much as 30 percent and as low as 9 percent. Benefits go up steadily as household exposure to grid electrification (measured by duration) increases and eventually reach a plateau. This paper also finds that rich households benefit more from electrification than poor households. Finally, estimates also show that income benefits of electrification on an average exceed cost by a wide margin.

Suggested Citation

  • Khandker, Shahidur R. & Barnes, Douglas F. & Samad, Hussain A., 2009. "Welfare impacts of rural electrification : a case study from Bangladesh," Policy Research Working Paper Series 4859, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4859
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Irani Arráiz & Carla Calero, 2015. "From Candles to Light: The Impact of Rural Electrification," IDB Publications (Working Papers) 6917, Inter-American Development Bank.
    2. Mollik, Sazib & Rashid, M.M. & Hasanuzzaman, M. & Karim, M.E. & Hosenuzzaman, M., 2016. "Prospects, progress, policies, and effects of rural electrification in Bangladesh," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 553-567.
    3. Daka, Karen Rajaona & Ballet, Jérôme, 2011. "Children's education and home electrification: A case study in northwestern Madagascar," Energy Policy, Elsevier, vol. 39(5), pages 2866-2874, May.
    4. Antonio Estache & Caroline Philippe, 2012. "The Impact of Private Participation in Infrastructure in Developing Countries: Taking Stock of about 20 Years of Experience," Working Papers ECARES ECARES 2012-043, ULB -- Universite Libre de Bruxelles.
    5. Abdul-Salam, Yakubu & Phimister, Euan, 2016. "How effective are heuristic solutions for electricity planning in developing countries," Socio-Economic Planning Sciences, Elsevier, vol. 55(C), pages 14-24.
    6. Mwaura, Francis M., 2012. "Adopting electricity prepayment billing system to reduce non-technical energy losses in Uganda: Lesson from Rwanda," Utilities Policy, Elsevier, vol. 23(C), pages 72-79.
    7. Chakravorty, Ujjayant & Pelli, Martino & Ural Marchand, Beyza, 2014. "Does the quality of electricity matter? Evidence from rural India," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 228-247.
    8. repec:lje:journl:v:22:y:2017:i:1:p:91-108 is not listed on IDEAS
    9. Fujii, Tomoki & Shonchoy, Abu S. & Xu, Sijia, 2018. "Impact of Electrification on Children’s Nutritional Status in Rural Bangladesh," World Development, Elsevier, vol. 102(C), pages 315-330.
    10. Justin Yifu Lin & Will Martin, 2010. "The financial crisis and its impacts on global agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 133-144, November.
    11. Deichmann, Uwe & Meisner, Craig & Murray, Siobhan & Wheeler, David, 2011. "The economics of renewable energy expansion in rural Sub-Saharan Africa," Energy Policy, Elsevier, vol. 39(1), pages 215-227, January.
    12. repec:gam:jeners:v:10:y:2017:i:11:p:1899-:d:119446 is not listed on IDEAS
    13. Irani Arráiz & Carla Calero, 2015. "From Candles to Light: The Impact of Rural Electrification," IDB Publications (Working Papers) 89136, Inter-American Development Bank.
    14. Paul Baringanire & Kabir Malik & Sudeshna Ghosh Banerjee, 2014. "Scaling Up Access to Electricity : The Case of Rwanda," World Bank Other Operational Studies 18680, The World Bank.
    15. Williams, Nathaniel J. & Jaramillo, Paulina & Taneja, Jay & Ustun, Taha Selim, 2015. "Enabling private sector investment in microgrid-based rural electrification in developing countries: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1268-1281.
    16. Matinga, Margaret Njirambo & Annegarn, Harold J., 2013. "Paradoxical impacts of electricity on life in a rural South African village," Energy Policy, Elsevier, vol. 58(C), pages 295-302.
    17. Lin, Justin Yifu & Martin, William J., 2009. "The Financial Crisis and Its Impact on the Global Agricultural Landscape," 2009 Conference, August 16-22, 2009, Beijing, China 53208, International Association of Agricultural Economists.
    18. van de Walle, Dominique & Ravallion, Martin & Mendiratta, Vibhuti & Koolwal, Gayatri, 2013. "Long-term impacts of household electrification in rural India," Policy Research Working Paper Series 6527, The World Bank.
    19. Janina Franco & V. Susan Bogach & Inés Pérez Arroyo & Maite Lasa, 2017. "Promoting Productive Uses of Electricity in Rural Electrification Programs," World Bank Other Operational Studies 28623, The World Bank.
    20. Barron, Manuel & Torero, Maximo, 2014. "Electrification and Time Allocation:Experimental Evidence from Northern El Salvador," MPRA Paper 63782, University Library of Munich, Germany.
    21. Bernhard G. Gunter, 2010. "The Impact of Development on CO2 Emissions: A Case Study for Bangladesh until 2050," Bangladesh Development Research Working Paper Series (BDRWPS) BDRWPS No. 10, Bangladesh Development Research Center (BDRC).

    More about this item

    Keywords

    Energy Production and Transportation; Access to Finance; Engineering; Electric Power; Rural Poverty Reduction;

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