Measuring the Returns to High Quality Electricity

Abstract: Much of the dialogue about electrification in developing countries has focused on how to provide rural households and communities with access to electricity for the first time. In urban areas, however, the primary issue is reliability rather than the lack of access to electricity. In Ghana, for example, 61% of firms see electricity reliability as a major constraint, with firms reporting an average of over 700 hours of outages annually. Anecdotally, both outages and voltage fluctuations are widespread and frequent, and we know that poor reliability can constrain the economic well-being of households and small businesses by discouraging investments in welfare-improving and income-generating appliances (like fans, refrigerators or production machinery) and reducing the output from existing appliances. Also, we know that households and firms sometimes devote considerable resources to alternatives to reliable grid power, including voltage regulators and backup generators. While we know that outages and voltage fluctuations are persistent issues, very little is known about their geographic and temporal incidence or their technical causes. This talk will describe ongoing work to both measure outages and voltage at a high level of spatial and temporal accuracy and measure the economic impacts of improving reliability.

Bio: Catherine Wolfram is the Cora Jane Flood Professor of Business Administration and Associate Dean for Academic Affairs at the Haas School of Business, University of California, Berkeley.  She is also the Program Director of the National Bureau of Economic Research Environment and Energy Economics Program. Wolfram has published extensively on the economics of energy markets. Her work has analyzed rural electrification programs in the developing world, energy efficiency programs in the US, the effects of environmental regulation on energy markets and the impact of privatization and restructuring in the US and UK. She is currently implementing several randomized controlled trials to evaluate energy programs in the U.S., Ghana, and Kenya. She received a PhD in Economics from MIT and an AB from Harvard. Before joining the faculty at UC Berkeley, she was an Assistant Professor of Economics at Harvard.