The Effect of Electrification on Socioeconomic Well-Being and Environmental Outcomes: Evidence for the Lao People’s Democratic Republic

Ricardo Sousa, Phouphet Kyophilavong (), Chowdhury Abdullah-Al-Baki (), Gazi Uddin and Donghyun Park
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Phouphet Kyophilavong: National University of Laos
Chowdhury Abdullah-Al-Baki: Linköping University

No 705, ADB Economics Working Paper Series from Asian Development Bank

Abstract: We investigate the impact of electrification on the economic, educational, and environmental outcomes of the Lao People’s Democratic Republic (Lao PDR). We use household-level data and a novel identification scheme, whereby we instrument the electrification status with the proportion of grid-connected households in a community. We find evidence consistent with the so-called “peer pressure for technology adoption,” as a higher proportion of electrified households is linked with a boost in the electrification of neighboring households. Additionally, we find that electrification: (i) significantly increases income (in particular, farm income); (ii) improves children's educational completion; and (iii) reduces the use of dirty fuel for lighting and cooking. From a policy perspective, public investments and financial incentives for electricity generation and distribution can play a key role in alleviating the existing economic, educational, and environmental bottlenecks of developing countries like the Lao PDR.

Keywords: electrification; household; fuel; income; education; Lao People’s Democratic Republic (search for similar items in EconPapers)
JEL-codes: Q40 Q49 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2023-12-04
New Economics Papers: this item is included in nep-dev, nep-ene, nep-env and nep-sea
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