October 13th, 2:30-4pm, E62-346
The Economic and Environmental Effects of Infrastructure Improvements: Evidence from Pakistan’s Electricity Sector
Speaker: Robyn Meeks (Duke)
Seminar title: “The Economic and Environmental Effects of Infrastructure Improvements: Evidence from Pakistan’s Electricity Sector”
Date/Time: October 13th, 2:30-4pm EST
Fiscal challenges pervade the electricity sector in many developing countries. Low bill payment and high theft mean that utility customers do not pay the official tariff rate, leading distribution companies to ration supply via load shedding. The resulting low quality electricity services can impair economic benefits from connections to the electrical grid. Using differences in intervention timing across space, we study the impacts of an infrastructure intervention that made illegal electricity connections physically more difficult in Karachi, Pakistan. We find that the installation of aerial bundled cables reduced non-technical losses and increased revenue recovery, due to an increase in formal utility customers and greater billed consumption among the existing formal customers. The intervention led to lower electricity delivered to the distribution system, a proxy for generation, which translates into a reduction in CO2 emissions that is 1.7 % and 4.3% of the electricity utility’s annual emissions. Changes in consumer surplus vary depending on the cost previously paid for illegal grid connections.