Impacts of Electricity Quality Improvements: Experimental Evidence on Infrastructure Investments

Abstract

Hundreds of millions of households depend on electricity grid connections providing low quality and unreliable services. Understanding the impacts of and consumer response to electricity quality improvements is important for development and the environment. We investigate this in the Kyrgyz Republic through randomized improvements in the grid, which can improve electricity service quality. Treated households experience significantly fewer voltage fluctuations per day, an indicator of improved electricity quality post-intervention. Treated households' billed consumption of electricity services increased during peak months post-intervention, with increases in consumption of 4% and 18% for homeowners and renters, respectively. Consistent with this, treated households, particularly renters, significantly increased ownership of electric heaters. Treated households invested more in energy efficiency, potentially mitigating their electricity bill increases post-intervention.

Keywords: Electricity, Infrastructure, Service Quality

JEL Classification: D01, D62, O13