Influence of improved supply on household electricity demand: evidence from rural India

Abstract:

Even as India pursues universal electricity access, household electricity consumption remains poorly understood. Studies have investigated residential electricity consumption, but most focus on urban consumers, even though a majority of the newly electrified households are in rural areas. Using primary data from 10,000 households, we investigate rural electricity consumption in 200 villages in Uttar Pradesh, Bihar, Odisha, and Rajasthan. We rely on energy use surveys that capture appliance use and multiple energy sources. We find that the surveyed households typically consume 39.3 kWh per month during the summer months, which is half of the country’s average residential consumption. We also find that hours of grid-electricity supply predicts consumption: every 1% increase in supply hours is associated with a 1.245% increase in consumption. Our findings suggest that improved supply can lead to significant welfare gains for consumers, and allow distribution companies to tap into unmet electricity demand in rural areas.

Publisher's Version

Last updated on 09/14/2020