Quality of Service Predicts Willingness to Pay for Household Electricity Connections in Rural India

Energy Policy, Forthcoming

49 Pages Posted: 7 Feb 2019

See all articles by Ryan Kennedy

Ryan Kennedy

University of Houston - Department of Political Science

Aseem Mahajan

Harvard University

Johannes Urpelainen

Johns Hopkins SAIS

Date Written: January 28, 2019

Abstract

While rural electrification has been a high priority for many governments in the developing world, the factors that make individual households more likely to pay for a connection have received insufficient attention. In particular, many studies have dealt with the role of affordability of grid connections, but they have generally avoided studying the effects of service quality. Estimating the effect of quality on willingness of potential customers to pay is a difficult task because of self-selection -- if quality is important, those in higher quality service areas are more likely to have a connection. Using household data from rural India, we estimate a Heckman selection model to deal with this issue and find a substantial impact of quality on willingness to pay for a connection in India. The results suggest that improving the quality of connections is critical to improving access.

Keywords: Energy Access; Rural Electrification; India; Selection Models

Suggested Citation

Kennedy, Ryan and Mahajan, Aseem and Urpelainen, Johannes, Quality of Service Predicts Willingness to Pay for Household Electricity Connections in Rural India (January 28, 2019). Energy Policy, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3325960 or http://dx.doi.org/10.2139/ssrn.3325960

Ryan Kennedy

University of Houston - Department of Political Science ( email )

TX 77204-3011
United States
713-743-1663 (Phone)
713-743-3890 (Fax)

Aseem Mahajan

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

Johannes Urpelainen (Contact Author)

Johns Hopkins SAIS ( email )

1740 Massachusetts Avenue, NW
Washington, DC 20036-1984
United States

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