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Social Interaction Effects and Connection to Electricity: Experimental Evidence from Rural Ethiopia

Tanguy Bernard and Maximo Torero ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper assesses the importance of social interactions in determining an individual’s choice to connect to an electrical grid, using an original dataset on a new rural electrification program in Ethiopia. Combining GPS information with random allocation of discount vouchers for connection to the grid, we show that neighbors’ connection behaviors have large effects on a household’s connection decision. This effect is also shown to decrease by distance: no peer effect is found for neighbors living farther than 100 meters away. Evidence also suggests that expectation interactions (through social learning of the benefits of electricity) or constraint interactions (through direct externalities of one’s connection on others’ wellbeing) are unlikely to fully account for these effects, and that preference interactions (through a ‘keeping up with neighbors’ type of mechanism) appear to be a plausible explanation. We discuss implications for further research and the design of development interventions.

Keywords: Ethiopia; Rural Electrification; Social Interactions (search for similar items in EconPapers)
JEL-codes: C9 C93 O12 O33 (search for similar items in EconPapers)
Date: 2014-09
New Economics Papers: this item is included in nep-afr, nep-ene, nep-exp, nep-reg and nep-soc
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Related works:
Journal Article: Social Interaction Effects and Connection to Electricity: Experimental Evidence from Rural Ethiopia (2015) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:61303

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