Experimental Evidence on the Demand for and Costs of Rural Electrification

Kenneth Lee, Edward Miguel and Catherine Wolfram

No 22292, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We present results from an experiment that randomized the expansion of electric grid infrastructure in rural Kenya. Electricity distribution is the canonical example of a natural monopoly. Randomized price offers show that demand for electricity connections falls sharply with price. Experimental variation in the number of connections combined with administrative cost data reveals considerable scale economies, as hypothesized. However, consumer surplus is far less than total costs at all price levels, suggesting that residential electrification may reduce social welfare. We discuss how leakage, reduced demand (due to red tape, low reliability, and credit constraints), and spillovers may impact this conclusion.

JEL-codes: L12 L94 O13 Q41 (search for similar items in EconPapers)
Date: 2016-05
New Economics Papers: this item is included in nep-ene and nep-exp
Note: DEV EEE IO PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (51)

Downloads: (external link)
http://www.nber.org/papers/w22292.pdf (application/pdf)

Related works:
Working Paper: Experimental Evidence on the Demand for and Costs of Rural Electrification (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:22292

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w22292

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().