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Welfare impacts of rural electrification : a case study from Bangladesh, Volume 1
Author:Khandker, Shahidur R.; Barnes, Douglas F.; Samad, Hussain A.; Country:Bangladesh;
Date Stored:2009/03/09Document Date:2009/03/01
Document Type:Policy Research Working PaperSubTopics:Energy Production and Transportation; Electric Power; Access to Finance; Rural Poverty Reduction; Engineering
Language:EnglishMajor Sector:Energy and mining
Rel. Proj ID:1W-Monitoring And Impact Evaluation Of Rural Electrification -- -- P111450;Region:South Asia
Report Number:WPS4859Sub Sectors:Renewable energy; Power
Collection Title:Policy Research working paper ; no. WPS 4859TF No/Name:TF091910-MONITORING AND IMPACT EVALUATION OF RURAL ELECTRIFICATION
Volume No:1  

Summary: 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.

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