The Economic and Environmental Effects of Making Electricity Infrastructure Excludable

Abstract

Electricity theft occurs when individuals cannot be excluded from accessing services. We study the impacts of an infrastructure upgrade in Karachi, Pakistan – converting bare distribution wires to aerial bundled cables (ABCs) – that was intended to prevent illegal connections. ABCs reduced unbilled consumption, increasing both the number of formal utility customers and per customer usage. ABC installation also decreased the utility’s annual CO$_2$ emissions via reduced electricity generation. Resulting changes in consumer surplus vary by consumer type (previously informal versus always formal) and depend on reductions in electricity rationing and the cost of prior illegal grid connections.

Zhenxuan Wang

Ph.D. Candidate

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