Electricity & Reliability in Small Business Performance

Project members:
Jacopo Bonan, Fondazione Eni Enrico Mattei
Giovanna d’Adda, University of Milan
Simon Quinn, University of Oxford and

Farah Said, Lahore University of Management Sciences

This research is funded by the International Growth Centre (IGC) and Private Enterprise Development in Low-Income Countries (PEDL). Micro-business activities represent a major source of employment in developing countries. These businesses are subject to several constraints that prevent them from growing and increasing productivity. Compared to constraints such as human capital or access to credit, relatively little attention has been dedicated to infrastructural constraints to small business development. This study will fill this gap by using a wealth of administrative data, and a large survey to rigorously evaluate the effects of energy quality on small firms. The proposed research will be conducted in collaboration with K-Electric. We will exploit discontinuities in the assignment of various feeder catchment areas to load shedding schedules, as well as a panel of electricity consumption, payment and loss rates, to recover causal effects of load shedding on the outcomes of small business customers of K-Electric.