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Welfare impacts of rural electrification : evidence from Vietnam

  • Khandker, Shahidur R.
  • Barnes, Douglas F.
  • Samad, Hussain
  • Minh, Nguyen Huu

Access to electricity is crucial for economic development and there is a growing body of literature on the impact of rural electrification on development. However, most studies have so far relied on cross-sectional surveys comparing households with and without electricity, which have well known causal attribution problems. This paper is one of the first studies to examine the welfare impacts of households’ rural electrification based on panel surveys conducted in 2002 and 2005 for some 1,100 households in rural Vietnam,. The findings indicate that grid electrification has been both extensive (connecting all surveyed communes by 2005) and intensive (connecting almost 80 percent of the surveyed households by 2005). Vietnam is unusual in that once electricity is locally available, both rich and poor households are equally likely to get the connection. The econometric estimations suggest that grid electrification has significant positive impacts on households’ cash income, expenditure, and educational outcomes. The benefits, however, reach a saturation point after prolonged exposure to electricity. Finally, this study recommends investigating the long-term benefits of rural electrification - not just for households, but for the rural economy as a whole.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5057.

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Date of creation: 01 Sep 2009
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Handle: RePEc:wbk:wbrwps:5057
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  1. James P. Ziliak & Thomas J. Kniesner, 1998. "The Importance of Sample Attrition in Life Cycle Labor Supply Estimation," Journal of Human Resources, University of Wisconsin Press, vol. 33(2), pages 507-530.
  2. Khandker, S.R., 1996. "Education Achievements and School Efficiency in Rural Bangladesh," World Bank - Discussion Papers 319, World Bank.
  3. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
  4. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
  5. Thomas, D. & Frankenberg, E. & Smith, J.P., 2000. "Lost But Not Forgotten Attribution and Follow-up in the Indonesian Family Life Survey," Papers 00-03, RAND - Labor and Population Program.
  6. Duncan Thomas & Elizabeth Frankenberg & James P. Smith, 2001. "Lost but Not Forgotten: Attrition and Follow-up in the Indonesia Family Life Survey," Journal of Human Resources, University of Wisconsin Press, vol. 36(3), pages 556-592.
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