Resource information
Lack of access to electricity is one of
the major impediments to growth and development of the rural
economies in developing countries. That is why access to
modern energy, in particular to electricity, has been one of
the priority themes of the World Bank and other development
organizations. Using a cross-sectional survey conducted in
2005 of some 20,000 households in rural Bangladesh, this
paper studies the welfare impacts of households' grid
connectivity. Based on rigorous econometric estimation
techniques, this study finds that grid electrification has
significant positive impacts on households' income,
expenditure, and educational outcomes. For example, the gain
in total income due to electrification can be as much as 30
percent and as low as 9 percent. Benefits go up steadily as
household exposure to grid electrification (measured by
duration) increases and eventually reach a plateau. This
paper also finds that rich households benefit more from
electrification than poor households. Finally, estimates
also show that income benefits of electrification on an
average exceed cost by a wide margin.
