Scandinavian Working Papers in Economics

Discussion Papers on Economics,
University of Southern Denmark, Department of Economics

No 7/2012: Power outages and economic growth in Africa

Thomas Barnebeck Andersen () and Carl-Johan Dalgaard ()
Additional contact information
Thomas Barnebeck Andersen: Department of Business and Economics, Postal: University of Southern Denmark, Campusvej 55, DK-5230 Odense M, Denmark
Carl-Johan Dalgaard: Department of Economics, Postal: University of Copenhagen, Øster Farimagsgade 5, DK-1353 Copenhagen K, Denmark

Abstract: This paper estimates the total effect of power outages on economic growth in Sub-Saharan Africa over the period 1995-2007. Outages are instrumented using a satellite-based measure of lightning density. As suggested by Henderson et al. (2011), we also combine Penn World Tables GDP data with satellite-based data on nightlights to arrive at a more accurate measure of economic growth. Our results suggest that the annual economic growth drag of a weak power infrastructure is about 2 percentage points.

Keywords: Economic growth; public utilities; electricity; earthlights; Africa

JEL-codes: H40; O10; O40

14 pages, February 28, 2012

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