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Study Overview

Title:
The economics of long-term grid reliability
Study is 3ie funded:
No
Study ID:
RIDIE-STUDY-ID-5ec6b8d43230b
Initial Registration Date:
05/21/2020
Last Update Date:
03/13/2020
Study Status:
Ongoing
Location(s):
Ghana
Abstract:

In urban areas of Ghana, a primary barrier to economic growth is the reliability of the grid. Since 2012, persistent power failures have given rise to the term 'Dumsor,' meaning 'lights off-on' in the Akan language. According to a 2013 World Bank report, 61% of firms see electricity reliability as a major constraint, with firms reporting an average of over 700 hours of outages annually, compared to 1.5 hours for firms in the U.S. We first study quasi-randomly assigned infrastructure upgrades to estimate the cost of marginal improvements in reliability. We then exploit spatial network discontinuities in power quality across Accra to understand the socio-economic impacts of long-term reliability improvements. We collect temporally and spatially high-resolution reliability data using the GridWatch technology, and combine these with administrative infrastructure network data and 5,000 on-the-ground firm and household surveys to accurately estimate these outcomes.

Registration Citation:
Categories:
Economic Policy
Energy
Private Sector Development
Public Sector Management
Urban Development
Additional Keywords:
Secondary ID Number(s):

Principal Investigator(s)

Name of First PI:
Susanna Berkouwer
Affiliation:
University of California at Berkeley
Name of Second PI:
Catherine Wolfram
Affiliation:
University of California at Berkeley

Study Sponsor

Name:
Millenium Challenge Corporation
Study Sponsor Location:
United States

Research Partner

Name of Partner Institution:
Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana
Type of Organization:
Research institute/University
Location:
Ghana
Intervention

Intervention Overview

Intervention:

We exploit spatial discontinuities in the quality of power between different feeders (labeled "Priority Feeders" and "Regular Feeders" by the Electricity Company of Ghana, ECG). Our objective is to understand the impact of improved power quality during the Dumsor Crisis on long-term economic performance.

Theory of Change:

1) Improved power quality may affect the way households or firm owners use electricity, e.g. they may purchase more or different types of equipment, or operating different hours. 

2) This change in electricity usage may lead to changes in economic outcomes, such as firm revenues or household well-being.

Multiple Treatment Arms Evaluated?
No

Implementing Agency

Name of Organization:
Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana
Type of Organization:
Research Institution/University

Program Funder

Name of Organization:
Millenium Challenge Corporation
Type of Organization:
Public Sector, e.g. Government Agency or Ministry

Intervention Timing

Intervention or Program Started at time of Registration?
No
Start Date:
03/16/2020
End Date:
Evaluation Method

Evaluation Method Overview

Primary (or First) Evaluation Method:
Difference in difference/fixed effects
Other (not Listed) Method:
Additional Evaluation Method (If Any):
Regression discontinuity
Other (not Listed) Method:

Method Details

Details of Evaluation Approach:

Our empirical strategy is to exploit spatial discontinuities in households and firms’ power reliability generated by the operations of the utility when load shedding is required to balance supply and demand. This strategy takes advantage of the fact that households and small businesses may happen to be connected to a feeder that serves a priority customer while a statistically equivalent group of neighboring households and businesses happen to be connected to feeders that do not serve a priority customers. For example, neighboring households may be statistically indistinguishable in terms of socioeconomic characteristics, but one may be quasi-randomly assigned to be served by a feeder that also serves a hospital or government ministry “down the line,” leading to higher power quality for one household but not the other. Detailed geospatial infrastructure data provided by the utility allow us to identify the feeders with special classifications that serve priority customers.

Outcomes (Endpoints):

Firms: Profit, Revenue, Costs of defensive investments

Households: Household income, Labor force participation index, Dumsor labor force participation index, Value of house as measure by rent, Dumsor value of house as measure by rent
Household education, Financial and credit health of household, Index of qualitative assessment of home activities, Dumsor index of qualitative assessment of home activities (2012-2016)

Unit of Analysis:
Household or business
Hypotheses:

For households, impacts on well-being might occur through a number of channels. For example, improvements in electricity reliability could result in increased labor force participation or home enterprise, increased income, higher usage of convenience appliances, improved financial and credit health of the household, more time spent in studying, improved neighborhood safety, and reduced expenditures on devices to protect appliances from low quality power and alternative sources of reliable power. We plan to estimate the relative importance of these channels by evaluating the impacts of electricity reliability changes on various intermediate socioeconomic outcomes. This will allow us to explore which channels may be most important for driving any observed changes in income we observe, and to better understand the mechanisms through which electricity reliability may affect incomes and economic growth.

For businesses, we seek to quantify the impact of power reliability on the growth of businesses. Do firms expand or intensify production, expand employment, and invest in expanded plant or other fixed assets and/or different production technologies that rely on electricity? We measure the impact of reliability on profits and intermediate inputs such as employment, investment in electricity and power-generating capital equipment, operating costs, secondary business activities, investments in substitutes for high-quality power, and hours of operation.

Unit of Intervention or Assignment:
50
Number of Clusters in Sample:
5000
Number of Individuals in Sample:
5000
Size of Treatment, Control, or Comparison Subsamples:
2,500 treatment and 2,500 control

Supplementary Files

Analysis Plan:
Other Documents:
Data

Outcomes Data

Description:
2,500 household and 2,500 firm surveys
Data Already Collected?
No
Data Previously Used?
Data Access:
Data Obtained by the Study Researchers?
Data Approval Process:
Approval Status:

Treatment Assignment Data

Participation or Assignment Information:
Yes
Description:
Data Obtained by the Study Researchers?
Data Previously Used?
Data Access:
Data Obtained by the Study Researchers?
Data Approval Process:
Approval Status:

Data Analysis

Data Analysis Status:

Study Materials

Upload Study Materials:

Registration Category

Registration Category:
Prospective, Category 1: Data for measuring impacts have not been collected
Completion

Completion Overview

Intervention Completion Date:
Data Collection Completion Date:
Unit of Analysis:
Clusters in Final Sample:
Total Observations in Final Sample:
Size of Treatment, Control, or Comparison Subsamples:

Findings

Preliminary Report:
Preliminary Report URL:
Summary of Findings:
Paper:
Paper Summary:
Paper Citation:

Data Availability

Data Availability (Primary Data):
Date of Data Availability:
Data URL or Contact:
Access procedure:

Other Materials

Survey:
Survey Instrument Links or Contact:
Program Files:
Program Files Links or Contact:
External Link:
External Link Description:
Description of Changes:

Study Stopped

Date:
Reason: