Politicians may target public goods to benefit their constituents, at the expense of others. I study this phenomenon in the context of Indian electricity and estimate the distributive consequences. Using new administrative billing data, I show that billed electricity consumption is lower for constituencies of the winning party, while actual consumption, measured by nighttime lights, is higher, using close-election regression discontinuities. I document the covert way in which politicians subsidize constituents via manipulating bills. These actions have a substantial deadweight loss of over $0.5 billion, hurting utilities' ability to provide reliable electricity, which has significant negative consequences for development.
The Indian power sector was largely comprised of state-owned, vertically-integrated firms that, for years, accrued massive losses. Between 1998 and 2003, a number of electricity reforms, under the umbrella of the Electricity Act, were phased in, which sought to make the electricity sector more competitive and efficient. I use an event-study framework to study the effect of these reforms on the manufacturing sector, one of the biggest consumers of electricity in India. The reforms affected manufacturing firms via two main channels: the price per unit of electricity and the quality of electricity. Surprisingly, while many expected states with multiple distributors to benefit consumers, I find that instead states that ended up with a single distributor supplied more reliable access to energy. Single distributors found it easier to raise prices, reflecting political realities. In such states, the reforms increased the amount of electricity consumed by manufacturing firms. Consistent with moving to a higher price tier, the average price paid by firms increases, and firms re-optimize their production decisions. Despite a price increase, firms respond to decreased blackouts (greater reliability) by increasing purchased electricity, worker hours and worker productivity. I find corroborating evidence of greater electrification using luminosity data (satellite night lights) that shows an increase in light density in these particular states.
Behavioral Dynamics in Transitions from College to the Workforce, with Catalina Franco
Revise and Resubmit at the Journal of Economic Behavior and Organization
This paper examines how decision-making may change when individuals face a permanent change in ﬁnancial resources after a major life transition. We experimentally elicit preference and cognitive measures from Colombian students on the job market, as well as from a comparison group of college peers in lower years, over eight months. This period encompasses the job search process while in college and ends after they graduate and begin their full-time jobs. Using a diﬀerence-in-diﬀerences setup, we ﬁnd that job-market students perceive greater ﬁnancial liquidity and take on more responsibilities. We do not ﬁnd any evidence of an increase in the take up of credit or that they move out of their parents’ homes, features commonly associated with this transition. Regarding preferences, we ﬁnd suggestive evidence that they become less present-biased and more prosocial along this transition to the workforce. We do not ﬁnd signiﬁcant changes in risk and ambiguity preferences or cognitive performance. These ﬁndings help us document the changes experienced during a universal transition, one that is achieved through own eﬀort rather than cash-transfers or government policies.
Works in Progress
Reducing Roof-top Solar Power Supply Delivery Costs in India (with Robyn Meeks)
Women Leaders and Environmental Outcomes (with Maulik Jagnani)
Climate Change, Clientelism, and Democratic Accountability (with Ajay Shenoy)
Raising Global Energy Ambitions: The 1000 KWh Modern Energy Minimum, The Energy for Growth Hub (2021), with Todd Moss, Morgan Bazilian, Moussa Blimpo, Lauren Culver, Jacob Kincer, Vijay Modi, Rose Mutiso, Varun Sivaram, Jay Taneja, Mark Thurber, Johannes Urpelainen, Michael Webber, Bob Muhwezi
Seeing is Believing: Poverty in the Palestinian Territories, World Bank (2014), with Tara Vishwanath, Brian Blankespoor, Faythe Calandra, Nandini Krishnan and Nobuo Yoshida
Poverty Mapping in the Kyrgyz Republic: Methodology and Key Findings, Working Paper 76690, World Bank (2013), with Nobuo Yoshida and Larisa Praslova
Understanding Seasonal Extreme Poverty in the Northwestern Region of Bangladesh, Vol. 2: The Extent of Seasonal Deprivation and Informal/Formal Coping Mechanisms, World Bank (2012), with Shinya Takamatsu and Nobuo Yoshida