The effect of access to electricity on rural households of underdeveloped countries: Evidence from Ethiopia

Recent research underscores the pivotal role of electricity in enhancing socioeconomic well-being of households. However, a substantial gap persists in comprehending its ramifications on households in underdeveloped nations, particularly in rural communities, which have been overlooked compared to urban counterparts. Notably, the association between expenditures on non-electric energy sources and electricity accessibility in underdeveloped rural households remains unexplored. Leveraging microdata from Ethiopia, our study reveals that electricity access diminishes expenses related to alternative energy and healthcare, augments income, education levels, and productivity, notwithstanding a positive correlation between access likelihood and income. These findings provide valuable insights into the effect of electricity on the lives of rural households in underdeveloped economies, particularly concerning their livelihoods and well-being. Our study investigates the link between electricity and expenditures on alternative energy sources, given the limited sample size. By assessing effects of electricity through income, and on income via health, education, and productivity, we elucidate the diverse benefits and limitations of electrification. Our analysis underscores the importance of integrating energy poverty into growth policy agendas and enriches understanding of the nexus between electricity access and household welfare in underdeveloped regions.