Fiona Burlig and Louis Preonas “Out of the Darkness and Into the Light? Development Effects of Rural Electrification” (Revised May 2021) (Revised version forthcoming in Journal of Political Economy) | WP-268R | Appendix
Abstract:
Nearly 1 billion people still lack electricity access. In response, 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, 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 while “fully electrifying” small villages reduces welfare, electrification likely increases welfare for larger villages.