Information and energy policy preferences: a survey experiment on public opinion about electricity pricing reform in rural India

Abstract

A common argument for the lack of economic reform in developing countries is popular opposition. If current economic policies are dysfunctional, could information about alternatives sway the voters? We examine if a simple argument emphasizing the need to increase electricity prices for improved supply can change public opinion in the case of India’s power sector reforms. The evidence comes from a survey experiment in rural Uttar Pradesh, which is both India’s largest state and has one of the lowest levels of household electrification. As expected, people respond to information about the relationship between electricity pricing, capacity investment, and reliability of supply by increasing their support for higher prices. However, no corresponding increase is observed for privatization of electricity generation. For external validity, we analyze an existing national survey on electricity privatization conducted in 2004/2005, finding patterns that support our argument.

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Notes

  1. 1.

    See http://cercind.gov.in/08022007/Act-with-amendment.pdf for the full text of the 2003 Electricity Act. Accessed on November 19, 2012.

  2. 2.

    See http://www.powermin.nic.in/JSP_SERVLETS/internal.jsp for the Ministry of Power’s website on rural electrification. Accessed on July 24, 2013.

  3. 3.

    “Executive Summary Shahjahanpur District.” See http://www.icssr.org/Executive%20Summary%20-%20Shahjahanpur.pdf. Accessed on March 18, 2014.

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Acknowledgments

We thank the Institute for Social and Economic Research and Policy (ISERP) at Columbia University for financial support and the Council on Energy, Environment and Water (CEEW) in New Delhi for research support. We thank the Mass Oriented Research and Social Elevation Lab (MORSEL) for conducting the surveys. We are grateful to seminar audiences at Columbia University and CEEW for their thoughts. Patrick Bayer gratefully acknowledges funding from the German Academic Exchange Service (DAAD) for a postdoctoral fellowship at Washington University in St. Louis. We are grateful to Catalina Angel for careful proofreading of the manuscript.

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Correspondence to Patrick Bayer.

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Aklin, M., Bayer, P., Harish, S.P. et al. Information and energy policy preferences: a survey experiment on public opinion about electricity pricing reform in rural India. Econ Gov 15, 305–327 (2014). https://doi.org/10.1007/s10101-014-0146-5

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Keywords

  • Electricity
  • Power sector
  • Survey experiment
  • Investment
  • India
  • Rural development

JEL Classification

  • O13
  • Q48
  • Q58