Scandinavian Working Papers in Economics

Working Papers,
Copenhagen Business School, Department of Economics

No 6-2021: Electrification and Welfare for the Marginalized: Evidence from India

Ashish Kumar Sedai (), Tooraj Jamasb (), Rabindra Nepal () and Ray Miller ()
Additional contact information
Ashish Kumar Sedai: Department of Economics, Colorado State University
Tooraj Jamasb: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark
Rabindra Nepal: School of Business, Faculty of Business and Law, University of Wollongong, Wollongong, Australia
Ray Miller: Department of Economics, Colorado State University

Abstract: Uneven electrification can be a source of welfare disparity. Given the recent progress of electrification in India, we analyze the differences in access and reliability of electricity, and its impact on household welfare for marginalized and dominant social groups by caste and religion. We carry out longitudinal analysis from a national survey, 2005-2012, using OLS, fixed effects, and panel instrumental variable regressions. Our analysis shows that marginalized groups (Hindu Schedule Caste/Schedule Tribe and Muslims) had higher likelihood of electricity access compared to the dominant groups (Hindu forward castes and Other Backward Caste). In terms of electricity reliability, marginalized groups lost less electricity hours in a day as compared to dominant groups. Results showed that electrification enabled marginalized households to increase their consumption, assets and move out of poverty; the effects were more pronounced in rural areas. The findings are robust to alternative ways of measuring consumption and use of more recent data set, 2015-2018. We posit that electrification improved the livelihoods of marginalized groups. However, it did not reduce absolute disparities among social groups.

Keywords: Electricity access; Electricity reliability; Instrumental variables; Marginalized groups; Welfare

JEL-codes: D12; D31; E12; I32

40 pages, January 15, 2021

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