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

Development Effects of Electrification: Evidence from the Topographic Placement of Hydropower... 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 ) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Economic Journal: Applied Economics American Economic Association

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

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Publisher
American Economic Association
Copyright
Copyright © 2013 by the American Economic Association
Subject
Articles
ISSN
1945-7790
eISSN
1945-7790
D.O.I.
10.1257/app.5.2.200
Publisher site
See Article on Publisher Site

Abstract

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 )

Journal

American Economic Journal: Applied EconomicsAmerican Economic Association

Published: Apr 1, 2013

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