1.
Impact of electrification on the
welfare of rural households in
Ethiopia
Dawit Mekonnen, Tiruwork Arega, Seid Yimam, and Claudia Ringler

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Motivation
In Ethiopia, more than half of the population has no access to electricity.
In the last decade, the country has gradually expanded electricity to thousands
of small towns and villages: e.g., National Electrification Plan (NEP1 &2)
NEP1.0 launched in 2017 connected 33 % of the population with on-grid
electrification (FDRE, 2019)
However, the impact of electricity expansion on households' welfare is not fully
documented
Rural electricity is essential to stimulate economic activities (Khandker et al.,
2009).
Rural electricity can improve key human welfare indicators including
education, health, and income (Kanagawa, 2008; Lipscomb et al., 2013; Aguirre,
2017; Kumar and Rauniyar, 2018).
Studies in Africa are limited to broader context: Southern and Sub-Saharan
region (Bernard, 2012; Peters and Sievert, 2016)

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Objective
Examine, quantify and document the gender-
disaggregated impacts of rural electrification on
education, market participation, income and health

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Conceptual framework
Shows the multifunctional benefits of rural electrification in addressing key
development concerns
Extended lighting-
Children educational
attainment (study
time )
)
Change light sources from
firewood & kerosene to
electricity-Health outcomes
•
• Increase labor productivity
• Reduced fuel collection time
• Extended working hour for
farm and non-farm activities
• Expand income generation
options
Rural
electrification
Social
development
Economic
development
Environmental
protection
• Reduce deforestation
Healthy
and
educated
workforce
Energy
security

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Data and methods
Data sources
Three rounds of panel data collected by ATA and IFPRI in
Tigray, Amhara, Oromia, and SNNP in 2012, 2016& 2019.
Includes household and community surveys
126 kebeles at community level
1,899 households
Method
Descriptive analysis
Difference-in-differences econometric approach
Panel data econometrics

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Descriptive results
Electrification data from
Household self reports
Three community leaders per kebele
Ethiopian Electric Power: universal
electric access program
42% kebeles are connected to main grid
according to community survey but not
included in EEP data
36% of kebeles listed as electrified by EEP
but are not connected according to
community leaders
Community survey and EEP
electrification report agree on only 64%
of kebeles
Lack of reliable electrification data
2019
Community
survey
Electrification status according to EEP
data
Non-electrified Electrified Total
Non-
electrified
57.74 35.71 52.87 (1004)
Electrified 42.26 64.29 47.13 (895)
Total 77 (1479) 22(420) 1899

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Descriptive results ….cont’d
Household characteristics
Electrified HHs are
Older
Head and spouses attend
school
Own more farmland& rooms
in the housing unit
Own more livestock
Live near to marketplace
(suggesting that easier
reachable communities get
electricity earlier or that roads
are built together with
electrification)
Non-electrified Electrified dif p-value
Gender of head
(1=male)
0.839 0.83 0.009 0.424
Age of head 48.46 49.64 -1.181 0.010
Head education 3.21 3.77 -0.559 0.000
Spouse education 0.627 1.23 -0.606 0.000
Household size 5.50 5.68 -0.185 0.008
TLU 3.50 3.81 -0.308 0.044
Farm size (ha) 1.70 1.77 -0.082 0.113
Number of rooms 2.23 2.33 -0.104 0.004
Time to market (min) 82.09 49.91 32.179 0.000
3916 1377

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Econometric results
Girls’ and boys schooling
Electricity connection is positively &
significantly associated with girls’
schooling
Girls’ school year significantly increased in
2019 compared to 2012
Spouse’s education positively affects boys
schooling
Male headship adversely influences boys’
& girls’ schooling
The influence is more pronounced
for girls
Boys’ schooling Girls’ schooling
VARIABLES Coef. SE Coef. SE
Survey year =2016 -0.067 0.045 -0.002 0.041
Survey year =2019 0.020 0.054 0.084* 0.051
Household
electrification status
(1=connected)
0.111 0.090 0.161* 0.083
Farm size (ha) -0.035* 0.020 -0.017 0.019
Spouse education 0.022** 0.010 -0.010 0.010
Head education 0.014** 0.007 0.010 0.006
Distance to market
(minute)
0.009 0.033 -0.015 0.034
Age head (years) 0.242 0.170 0.388** 0.165
Gender head -0.265** 0.133 -0.502*** 0.142
Family size 1.215*** 0.100 1.484*** 0.103
Observations 3,924 3,880

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Econometric results…cont’d
Market participation
Access to electricity significantly improves
farmers’ market participation
Farm households market participation
improves over time relative to 2012
Larger families and educated spouses
positively affect market participation
Longer distance from homestead to
marketplace negatively influences market
participation
Market participation
Coef. SE
Survey year =2016 28.819*** 0.692
Survey year =2019 28.714*** 0.768
Household electrification
status (1=connected)
6.203*** 1.846
Farm size (ha) 0.308 0.362
Spouse education 0.447*** 0.169
Head education 0.010 0.104
Distance to market
(minute)
-1.344** 0.553
Age head (years) -0.990 2.205
Gender head (1=male) 0.709 1.998
Family size 4.080*** 1.216
Observations 5,163

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Econometric results…cont’d
Nonfarm income
Access to electricity is positively related to
nonfarm income earning
The impact is not significant due to the lack
of productive uses of electricity in rural
Ethiopia
Farm households' nonfarm income was
higher in 2016 compared to 2012
Larger family size positively influences off-
farm income generation
Older heads appear to earn less non-farm
income
Nonfarm income
VARIABLES Coef. SE.
Survey year =2016 0.504*** 0.122
Survey year =2019 -0.278** 0.133
Household electrification status
(1=connected)
0.434 0.309
Farm size (ha) 0.101* 0.052
Spouse education 0.028 0.033
Head education -0.013 0.017
Distance to market (minute) -0.032 0.091
Age head (years) -1.622*** 0.399
Gender head (1=male) 0.561* 0.321
Family size 0.631*** 0.211
Constant 7.570*** 1.596
Observations 5,655

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Econometric results…cont’d
Health
Access to electricity positively related to
health improvement, but the impact is not
signficant
Overall health situation of farm household
worsens over time compared to 2012
Owning larger farm size has positive
influence on improved health condition
VARIABLES Health
Coef. SE
Survey year =2016 -0.291*** 0.016
Survey year =2019 -0.307*** 0.017
Household electrification
status (1=connected)
0.006 0.024
Farm size (ha) 0.019*** 0.006
Spouse education -0.004 0.003
Head education -0.002 0.002
Distance to market (minute) 0.018* 0.011
Age head (years) 0.030 0.044
Gender head (1=male) -0.031 0.037
Family size -0.002 0.023
Constant 0.255 0.177
Observations 5,655

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Concluding remarks
There is a disconnect between local statements on electricity access and
connections and data available at EEP; bad data can affect other
investments in these communities
There are some early indications of welfare impacts linked to electricity
access, including girls’ schooling; household market participation; and off-
farm income
To further strengthen welfare outcomes, electricity access should be linked
to additional productive uses, such as electrified injera baking or irrigation
pumps

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Future works
Evaluation of solar mini-grid project (supporting Duke University)
Implementing in 9 mini grid sites at four regions: three sites in the Blue Nile
basin
Work on the productive uses of electricity for irrigated agriculture
Baseline data collection is underway in collaboration with Duke University
Data is being collected at household and community levels in the mini grid
sites and similar number of control sites
We will conduct midterm and endline surveys
Hopeful to do more rigorous work using the mini grid data

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Future works …cont’d
Groundwater governance
We are working on the preliminary assessments of groundwater challenges in
the Tana Beles sub basin based on stakeholder discussion and literature
We are exploring groundwater governance tools that can be applied in the
Tana Beles sub basin

15.
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