Fiona Burlig and Louis Preonas, "Out of the Darkness and Into the Light? Development Effects of Rural Electrification" (Revised October 2016) Full Paper
Over 1 billion people lack electricity access. Developing countries are investing billions of dollars in rural electrification, targeting economic growth and poverty reduction, despite limited empirical evidence. We estimate the effects of rural electrification on economic development in the context of India’s national electrification program, which reached over 400,000 villages. We use a regression discontinuity design and high-resolution geospatial data to identify the medium-run economic impacts of electrification. We find a substantial increase in electricity use, but reject effects larger than 0.26 standard deviations across numerous measures of economic development, suggesting that rural electrification may be less beneficial than previously thought.