Welfare Impacts of Rural Electrification: Evidence from Vietnam

51 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

Nguyen Huu Minh

World Bank

Date Written: September 1, 2009

Abstract

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.

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

Suggested Citation

Khandker, Shahidur R. and Barnes, Douglas F. and Samad, Hussain A. and Minh, Nguyen Huu, Welfare Impacts of Rural Electrification: Evidence from Vietnam (September 1, 2009). World Bank Policy Research Working Paper No. 5057. Available at SSRN: https://ssrn.com/abstract=1476699

Shahidur R. Khandker (Contact Author)

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

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

Nguyen Huu Minh

World Bank

1818 H Street, NW
Washington, DC 20433
United States

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