How Do Electricity Shortages A\00ffect Production? Evidence from India

Stephen O'Connell, Allan Collard-Wexler () and Hunt Allcott
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Hunt Allcott: NYU

No 159, 2015 Meeting Papers from Society for Economic Dynamics

Abstract: Endemic blackouts are a particularly salient example of how poor infrastructure might reduce growth in developing economies. We study how electricity shortages affect all Indian manufacturers, using an instrument based on hydroelectricity production and a hybrid Leontief/Cobb-Douglas production function model. Shortages reduce average output by about five percent, but because most inputs can be stored during outages, productivity losses are much smaller. Plants without generators have much larger losses, and because of economies of scale in generator capacity, shortages more severely affect small plants.

Date: 2015
New Economics Papers: this item is included in nep-eff, nep-ene and nep-reg
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:red:sed015:159

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