The Economic and Environmental Effects of Infrastructure Improvements: Evidence from Pakistan's Electricity Sector

Abstract

High electricity losses due to unbilled consumption are an impediment to reliable and affordable electricity provision in developing countries. We study the impacts of an infrastructure intervention that made illegal electricity connections physically more difficult in Karachi, Pakistan. The installation of aerial bundled cables (ABCs) reduced non-technical losses and increased revenue recovery, by increasing both the number of formal utility customers and the billed consumption among formal customers. Consumer surplus changes from ABCs depend on the cost of prior illegal grid connections and whether electricity quality improves. ABCs reduced the utility’s annual CO$_2$ emissions, via reductions in electricity generation.

Zhenxuan Wang

Ph.D. Candidate

My research interests lie at the intersection of environmental and energy economics, climate policy, and development economics.