Welfare Impacts of Rural Electrification: A Case Study from Bangladesh

39 Pages Posted: 20 Apr 2016

See all articles by Shahidur R. Khandker

Shahidur R. Khandker

World Bank - Development Research Group (DECRG)

Douglas F. Barnes

World Bank

Hussain A. Samad

World Bank

Date Written: March 1, 2009

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.

Keywords: Energy Production and Transportation, Access to Finance, Engineering, Electric Power, Rural Poverty Reduction

Suggested Citation

Khandker, Shahidur R. and Barnes, Douglas F. and Samad, Hussain A., Welfare Impacts of Rural Electrification: A Case Study from Bangladesh (March 1, 2009). World Bank Policy Research Working Paper Series, Vol. , pp. -, 2009. Available at SSRN: https://ssrn.com/abstract=1368068

Shahidur R. Khandker (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Douglas F. Barnes

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Hussain A. Samad

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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