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Examining the economic impact of COVID-19 in India through daily electricity consumption and nighttime light intensity

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  • Beyer, Robert C.M.
  • Franco-Bedoya, Sebastian
  • Galdo, Virgilio

Abstract

The COVID-19 pandemic has disrupted economic activity in India. Adjusting policies to contain transmission while mitigating the economic impact requires an assessment of the economic situation in near real-time and at high spatial granularity. This paper shows that daily electricity consumption and monthly nighttime light intensity can proxy for economic activity in India. Energy consumption is compared with the predictions of a consumption model that explains 90 percent of the variation in normal times. Energy consumption declined strongly after a national lockdown was implemented on March 25, 2020 and remained a quarter below normal levels throughout April. It recovered subsequently, but electricity consumption remained lower even in September. Not all states and union territories have been affected equally. While electricity consumption halved in some, it declined very little in others. Part of the heterogeneity is explained by the prevalence of COVID-19 infections, the share of manufacturing, and return migration. During the national lockdown, higher COVID-19 infection rates at the district level were associated with larger declines in nighttime light intensity. Without effectively reducing the risk of a COVID-19 infection, voluntary reductions of mobility will hence prevent a return to full economic potential even when restrictions are relaxed. Together, daily electricity consumption and nighttime light intensity allow monitoring economic activity in near real-time and high spatial granularity.

Suggested Citation

  • Beyer, Robert C.M. & Franco-Bedoya, Sebastian & Galdo, Virgilio, 2021. "Examining the economic impact of COVID-19 in India through daily electricity consumption and nighttime light intensity," World Development, Elsevier, vol. 140(C).
    • Handle: RePEc:eee:wdevel:v:140:y:2021:i:c:s0305750x20304149
    DOI: 10.1016/j.worlddev.2020.105287
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    More about this item

    Keywords

    COVID-19; Lockdown; Electricity consumption; Nighttime light intensity; India;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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