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American Economic Journal: Applied Economics: Vol. 5 No. 2 (April 2013)

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Development Effects of Electrification: Evidence from the Topographic Placement of Hydropower Plants in Brazil

Article Citation

Lipscomb, Molly, A. Mushfiq Mobarak, and Tania Barham. 2013. "Development Effects of Electrification: Evidence from the Topographic Placement of Hydropower Plants in Brazil." American Economic Journal: Applied Economics, 5(2): 200-231.

DOI: 10.1257/app.5.2.200

Abstract

We estimate the development effects of electrification across Brazil over the period 1960-2000. We simulate a time series of hypothetical electricity grids for Brazil for the period 1960-2000 that show how the grid would have evolved had infrastructure investments been made based solely on geography-based cost considerations. Using the model as an instrument, we document large positive effects of electrification on development that are underestimated when one fails to account for endogenous targeting. Broad-based improvement in labor productivity across sectors and regions rather than general equilibrium re-sorting appears to be the likely mechanism by which these development gains are realized. (JEL H54, L94, O11, O13, Q41, Q43)

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Authors

Lipscomb, Molly (U VA)
Mobarak, A. Mushfiq (Yale U)
Barham, Tania (U CO)

JEL Classifications

H54: National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock
L94: Electric Utilities
O11: Macroeconomic Analyses of Economic Development
O13: Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Q41: Energy: Demand and Supply
Q43: Energy and the Macroeconomy

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