Experimental Evidence on the Economics of Rural Electrification

We present results from an experiment that randomized the expansion of electric grid infrastructure in rural Kenya. Electricity distribution is a canonical example of a natural monopoly. Experimental variation in the number of connections, combined with administrative cost data, reveals considerable...

Full description

Saved in:
Bibliographic Details
Published in:The Journal of political economy 2020-04, Vol.128 (4), p.1523-1565
Main Authors: Lee, Kenneth, Miguel, Edward, Wolfram, Catherine
Format: Article
Language:English
Subjects:
Consumption
Economic theory
Electricity
Households
Infrastructure
Monopolies
Political economy
Rural communities
Rural electrification
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We present results from an experiment that randomized the expansion of electric grid infrastructure in rural Kenya. Electricity distribution is a canonical example of a natural monopoly. Experimental variation in the number of connections, combined with administrative cost data, reveals considerable scale economies, as hypothesized. Randomized price offers indicate that demand for connections falls sharply with price. Among newly connected households, average electricity consumption is very low, implying low consumer surplus. We do not find meaningful medium-run impacts on economic and noneconomic outcomes. We discuss implications for current efforts to increase rural electrification in Kenya and highlight how various factors may affect interpretation.
ISSN:0022-3808
1537-534X
DOI:10.1086/705417