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CPP WP-01-2019

 

 

CPP WP 01-2019: Increasing Rural Electrification through Connection Campaigns

Brian Blankenship (Columbia University), Ryan Kennedy (University of Houston), Aseem Mahajan (Harvard University), Jason C. Yu Wong (Columbia University), and Johannes Urpelainen (SAIS-John Hopkins University)

Abstract: In September 2017, the Indian government launched its “Saubhagya” initiative, aimed at achieving universal rural electrification. However, there is little academic study of strategies to increase electrification rates. We argue that a key and underappreciated barrier to expanding electrification is the transaction costs that households face in applying for a connection. Before applying, households must first obtain information on the costs of an application and the requirements for submitting one. Additionally, distribution companies’ lack of capacity impedes electrification even when households seek connections. We conducted a randomized controlled trial in Uttar Pradesh, consisting of an informational campaign which provided information about the costs and procedure of applying for connections. We find that households exposed to the campaign were three times as likely to apply for a connection, and expressed lower perceptions of the cost and difficulty of applying. However, actual connection rates remained unchanged. The results suggest that transaction costs are an important barrier to electrification, but limited capacity is also an obstacle.