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)
Lipscomb, Molly, A. Mushfiq Mobarak, and Tania Barham.
"Development Effects of Electrification: Evidence from the Topographic Placement of Hydropower Plants in Brazil."
American Economic Journal: Applied Economics,
National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock
Macroeconomic Analyses of Economic Development
Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
Energy: Demand and Supply
Energy and the Macroeconomy