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Short-run impact of electricity on social capital: evidence from a rural electricity program

Author

Listed:
  • Ngawang Dendup

    (Waseda University)

  • Dil Bahadur Rahut

    (Asian Development Bank Institute)

  • Yayue Xiao

    (Waseda University)

Abstract

Access to electricity is increasing in developing nations, driven by the belief that it can enhance economic outcomes. However, beyond its economic impact, electricity availability can influence non-economic outcomes like social capital, especially in rural settings. Social capital plays a crucial role in promoting collective actions and improving the credibility of social contract, which can help alleviate market inefficiencies stemming from challenges in enforcing such agreements. This study investigates the impact of electricity on social capital, focusing on household-level trust, interactions and engagements. To overcome the potential endogeneity of electricity access, we estimate a bivariate probit model, using a plausibly exogenous land gradient as an instrument. Our findings suggest that, in the short run, the influence of electricity on various social capital measures is not statistically significant. However, we do find some evidence of a heterogeneous effect.

Suggested Citation

  • Ngawang Dendup & Dil Bahadur Rahut & Yayue Xiao, 2025. "Short-run impact of electricity on social capital: evidence from a rural electricity program," Empirical Economics, Springer, vol. 68(1), pages 281-325, January.
    • Handle: RePEc:spr:empeco:v:68:y:2025:i:1:d:10.1007_s00181-024-02632-w
    DOI: 10.1007/s00181-024-02632-w
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    More about this item

    Keywords

    Electricity; Social capital; Appliance adoption; Trust; Social interaction;
    All these keywords.

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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