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Rural electrification and groundwater pumps in India: Evidence from the 1982–1999 period

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  • Smith, Michael Graham
  • Urpelainen, Johannes

Abstract

India's groundwater extraction is heavily dependent on diesel pumps, and one reason is the lack of reliable power supply. The widespread use of diesel pumps is an economic problem due to the inefficiency and high cost of said pumps. Could rural electrification improve the situation? We estimate the relationship between village electrification and the counts of electric and diesel pumps in India, 1982–1999. We find that, in addition to increasing the number of electric pumps, rural electrification also greatly increases the number of diesel pumps. While initially surprising, these results make sense in an environment characterized by frequent power outages and constant quality problems. If rural electrification increases the number of electric pumps and promotes irrigated agriculture, the demand for diesel pumps also grows because many farmers need a reliable pump that does not depend on electricity. Without improvements in the supply of electricity through rational power sector reforms, India cannot stop the spread of diesel pumps through rural electrification. For energy and development economists, the results are novel because previous econometric work has largely focused on industrial uses of power.

Suggested Citation

  • Smith, Michael Graham & Urpelainen, Johannes, 2016. "Rural electrification and groundwater pumps in India: Evidence from the 1982–1999 period," Resource and Energy Economics, Elsevier, vol. 45(C), pages 31-45.
    • Handle: RePEc:eee:resene:v:45:y:2016:i:c:p:31-45
    DOI: 10.1016/j.reseneeco.2016.05.004
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    References listed on IDEAS

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    Cited by:

    1. Hrozencik, R. Aaron, 2018. "Energy, Food, and Water; Electricity Cooperative Pricing and Groundwater Irrigation Decisions," 2018 Annual Meeting, August 5-7, Washington, D.C. 274322, Agricultural and Applied Economics Association.
    2. Nthambi, Mary & Markova-Nenova, Nonka & Wätzold, Frank, 2021. "Quantifying Loss of Benefits from Poor Governance of Climate Change Adaptation Projects: A Discrete Choice Experiment with Farmers in Kenya," Ecological Economics, Elsevier, vol. 179(C).
    3. Nag, Suryadeepto, 2024. "Does reliable electricity mean lesser agricultural labor wages? Evidence from Indian villages," Energy Policy, Elsevier, vol. 190(C).
    4. Bigerna, Simona & Choudhary, Piyush & Kumar Jain, Nikunj & Micheli, Silvia & Polinori, Paolo, 2022. "Avoiding unanticipated power outages: households’ willingness to pay in India," MPRA Paper 114160, University Library of Munich, Germany.

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