Electricity access has not been looked at much by EAs, but the state of the art is this paper which finds that extending electricity access to remote areas does not pass cost-benefit, at least in terms of the economic outcomes.
Not central to this post but just wanted to mention!
FWIW, I found much higher ROI from improving quality of electricity access (e.g. reducing the number of blackouts; based pretty heavily on this paper from Fried and Lagakos) than from improving the quantity of electricity supplied.
Makes sense! The cost of electrification, especially in remote areas, is probably far higher than the cost of improving electricity infrastructure. The description in the post also focuses (in my reading) on household electrification, while Fried and Lagakos focuses on the effects on firms, which likely have higher returns. Most people I’ve spoken to agree that the frontier is looking at benefits to the production side.
Yes, we also came to the conclusion that firm electrification > household electrification. My comment was meant as a gentle suggestion that perhaps electricity access is not the highest ROI margin. ;)
Electricity access has not been looked at much by EAs, but the state of the art is this paper which finds that extending electricity access to remote areas does not pass cost-benefit, at least in terms of the economic outcomes.
Not central to this post but just wanted to mention!
FWIW, I found much higher ROI from improving quality of electricity access (e.g. reducing the number of blackouts; based pretty heavily on this paper from Fried and Lagakos) than from improving the quantity of electricity supplied.
Makes sense! The cost of electrification, especially in remote areas, is probably far higher than the cost of improving electricity infrastructure. The description in the post also focuses (in my reading) on household electrification, while Fried and Lagakos focuses on the effects on firms, which likely have higher returns. Most people I’ve spoken to agree that the frontier is looking at benefits to the production side.
Yes, we also came to the conclusion that firm electrification > household electrification. My comment was meant as a gentle suggestion that perhaps electricity access is not the highest ROI margin. ;)
Thanks for sharing! We will make sure the fellow who is working on this will have a look at that paper.