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Out of the Darkness and into the Light? Development Effects of Rural Electrification

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  • Fiona Burlig
  • Louis Preonas

Abstract

Nearly 1 billion people still lack electricity access. Developing countries are investing billions of dollars in “last-mile” electrification, although evidence on its economic impacts is mixed. We estimate the development effects of rural electrification in the context of India’s national electrification program, RGGVY (Rajiv Gandhi Grameen Vidyutikaran Yojana), which reached over 400,000 villages. Using regression-discontinuity and difference-in-differences designs, we estimate that RGGVY meaningfully expanded electricity access. However, the program generated limited economic impacts after 3–5 years. Scaling our intent-to-treat estimates using instrumental variables, we find that “full electrification” reduces welfare in small villages but has a 33% internal rate of return in large villages.

Suggested Citation

  • Fiona Burlig & Louis Preonas, 2024. "Out of the Darkness and into the Light? Development Effects of Rural Electrification," Journal of Political Economy, University of Chicago Press, vol. 132(9), pages 2937-2971.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/730204
    DOI: 10.1086/730204
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    Cited by:

    1. Feng Wang & Weiwei Liu, 2024. "The Current Status, Challenges, and Future of China’s Photovoltaic Industry: A Literature Review and Outlook," Energies, MDPI, vol. 17(22), pages 1-18, November.
    2. Nan Yang & Jinliu Chen & Liang Ban & Pengcheng Li & Haoqi Wang, 2024. "Pre-Planning and Post-Evaluation Approaches to Sustainable Vernacular Architectural Practice: A Research-by-Design Study to Building Renovation in Shangri-La’s Shanpian House, China," Sustainability, MDPI, vol. 16(21), pages 1-22, November.

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