You Can't Count on Me: The Impact of Electricity Unreliability on Productivity

Sharon Poczter

Agricultural and Resource Economics Review, 2017, vol. 46, issue 3, 579-602

Abstract: While access to reliable electricity can significantly constrain industrial production, little is known as to how unreliability impacts firm level productivity. This is a particularly salient issue for firms in developing countries, where electricity provision is still unreliable and self-generation is costly. This paper analyzes the impact of electricity provision on productivity, instrumenting for electricity demand with district level solar irradiance. Results indicate that firms exhibit decreasing productivity in the initial stages of electricity adoption that decreases over time. Furthermore, I find that unreliability negatively impacts productivity initially and over time, and this effect is larger for smaller firms.

Date: 2017
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