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Welfare impacts of rural electrification : a case study from Bangladesh

Author

Listed:
  • Khandker, Shahidur R.
  • Barnes, Douglas F.
  • Samad, Hussain A.

Abstract

Lack of access to electricity is one of the major impediments to growth and development of the rural economies in developing countries. That is why access to modern energy, in particular to electricity, has been one of the priority themes of the World Bank and other development organizations. Using a cross-sectional survey conducted in 2005 of some 20,000 households in rural Bangladesh, this paper studies the welfare impacts of households'grid connectivity. Based on rigorous econometric estimation techniques, this study finds that grid electrification has significant positive impacts on households'income, expenditure, and educational outcomes. For example, the gain in total income due to electrification can be as much as 30 percent and as low as 9 percent. Benefits go up steadily as household exposure to grid electrification (measured by duration) increases and eventually reach a plateau. This paper also finds that rich households benefit more from electrification than poor households. Finally, estimates also show that income benefits of electrification on an average exceed cost by a wide margin.

Suggested Citation

  • Khandker, Shahidur R. & Barnes, Douglas F. & Samad, Hussain A., 2009. "Welfare impacts of rural electrification : a case study from Bangladesh," Policy Research Working Paper Series 4859, The World Bank.
    • Handle: RePEc:wbk:wbrwps:4859
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    References listed on IDEAS

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    5. Khandker, S.R., 1996. "Education Achievements and School Efficiency in Rural Bangladesh," World Bank - Discussion Papers 319, World Bank.
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    More about this item

    Keywords

    Energy Production and Transportation; Access to Finance; Engineering; Electric Power; Rural Poverty Reduction;
    All these keywords.

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