Independent research & practical ideas for global prosperity

Development Effects of Electricity: Evidence from the Geologic Placement of Hydropower Plants in Brazil

Oct 21, 2008

Center for Global Development
and The Paul H. Nitze School of Advanced International Studies present
The Massachusetts Avenue Development Seminar (MADS)* on
Development Effects of Electricity
Evidence from the Geologic Placement of Hydropower Plants in Brazil

Featuring

A. Mushfiq Mobarak
Assistant Professor of Economics
Yale University School of Management

Discussant:

Vijaya Ramachandran
Senior Fellow
Center for Global Development

Hosted and Moderated by

Karen Macours
Assistant Professor of International Economics
Johns Hopkins University SAIS

Tuesday, October 21, 2008
12:00pm--1:30pm
Lunch will be served

at
Center for Global Development
1800 Massachusetts Avenue, NW, Third Floor, Washington, DC
Closest Metro: Dupont Circle (Red Line)

RSVP ONLINE

Abstract: We exploit quasi-random variation in hydro-power generation and transmission in Brazil in order to isolate of the causal effects of electricity grid expansion on changes in population density and GDP. Since hydro-power generation requires intercepting water at high velocity, there is a random component to households’ access to electricity in a country that relies heavily on hydro-power, as that access depends on the household’s proximity to rivers with a gradient suitable for hydro-electricity generation. This allows isolation of the causal component of the relationship between electrification and development outcomes. The most plausible interpretation of our findings is that local access to electricity does not cause increases in population density, but does cause increases in GDP per capita by raising worker productivity.

*The Massachusetts Avenue Development Seminar (MADS) series is an effort by the Center for Global Development and The Paul H Nitze School of Advanced International Studies to take advantage of the incredible concentration of great international development scholars in the Metro Washington, DC area. The series seeks to bring together members of this community and improve communication between them.