Does (Better) Electricity Supply Increase Household Enterprise Income in India?

Energy Policy, doi: 10.1016/j.enpol.2013.02.025, Forthcoming

10 Pages Posted: 27 Mar 2013 Last revised: 6 Apr 2013

Date Written: 2013

Abstract

Electricity access is an important driver of economic development. Previous studies treat electrification as a binary outcome. In reality, in developing countries households with access face chronic supply interruptions, which can last up to 12 h a day. This is the first study to estimate the income differences in urban and rural non-farm enterprises in Indian households with different levels of electricity supply, using a subset of 8125 households in the India Human and Development Survey, a cross-sectional national sample of 41,554 households. I use multiple econometric approaches, including linear regression with an instrument variable and propensity-score matching with multiple treatment levels to represent supply availability. I find a robust income effect of access, and suggestive evidence of the effect of better supply availability. The aggregate income impact across existing NFEs in India of improving supply to 16 h a day could be on the order of 0.1 percent of GDP.

Keywords: energy poverty, electricity reliability, development

Suggested Citation

Rao, Narasimha D., Does (Better) Electricity Supply Increase Household Enterprise Income in India? (2013). Energy Policy, doi: 10.1016/j.enpol.2013.02.025, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2240117

Narasimha D. Rao (Contact Author)

IIASA ( email )

Schlossplatz 1
Laxenburg, A-2361
Austria

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