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Power plants improve local residents' wealth: A case study of Nigeria

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  • Akinyemi, Taiwo
  • Jung, Suhyun

Abstract

Electricity generated from power plants and associated economic activities can be a way to improve local livelihoods in many developing countries. However, the existing evidence on the impacts of power plants on nearby residents' wealth and their mechanisms is scant and mixed at best. We examine the impacts of power plants on nearby residents' asset-based wealth using six rounds of Nigeria Demographic and Health Surveys (NDHS) and comprehensive power plant operations data in Nigeria. We find that households within 10 km of operational power plants have gained higher asset-based wealth scores by 0.2–2.7 than those located 10–20 km away. These wealth increases are most pronounced for households near larger-capacity plants and those with members in manual labor and sales/services occupations, likely driven by heightened demand during both the construction and operational phases of power plants. Additionally, we find that the likelihood of electricity access increases with power plant operations. Our results highlight the potential role of increased economic opportunities and electricity access in driving wealth gains through power plant construction and operations and offer policy insights into aligning economic advancement initiatives with the national electricity development plan for Nigeria and other developing countries.

Suggested Citation

  • Akinyemi, Taiwo & Jung, Suhyun, 2025. "Power plants improve local residents' wealth: A case study of Nigeria," Energy Economics, Elsevier, vol. 142(C).
    • Handle: RePEc:eee:eneeco:v:142:y:2025:i:c:s0140988324008405
    DOI: 10.1016/j.eneco.2024.108131
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    Keywords

    Power plants; Wealth; Electricity access; Impact assessment; Nigeria;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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