Journal of Economic Perspectives

Our Executive Director Ken Lee along with other researchers discuss implications for current efforts to increase rural electrification in Kenya and highlight how various factors may affect interpretation.

In recent years, electrification has reemerged as a key priority in low-income countries, with a particular focus on electrifying households. Yet the microeconomic literature examining the impacts of electrifying households on economic development has produced a set of conflicting results. Does household electrification lead to measurable gains in living standards or not? Focusing on-grid electrification, researchers discuss how the divergent conclusions across the literature can be explained by differences in methods, interventions, the potential for spillovers, and populations.

Researchers then use experimental data from Lee, Miguel, and Wolfram (2019)—a field experiment that connected randomly selected households to the grid in rural Kenya—to show that impacts can vary even across individuals in neighboring villages. Specifically, researchers show that households that were willing to pay more for grid electrification may gain more from electrification compared to households that would only connect for free. The paper concludes that access to household electrification alone is not enough to drive meaningful gains in development outcomes. Instead, future initiatives may work better if paired with complementary inputs that allow people to do more with power.

Read the paper below