Electricity Reliability and Economic Development in Cities: A Microeconomic Perspective

Author(s): Gertler, Paul J; Lee, Kenneth; Mobarak, A. Mushfiq | Abstract: In this Energy for Economic Growth (“EEG”) state-of-knowledge paper, we reviewevidence on the causes and consequences of electricity outages, focusing on cities.Studies on the microeconomics of electrification concentrate mainly on the impacts of expanding access to electricity in rural areas. In many cities, the primary issue is the reliability of the electric grid rather than the lack of access to electricity. We discuss supply side, demand side, and political economy factors causing outages, the economic impacts of outages, and how electricity suppliers respond to the prospect of shortages. Finally, we highlight areas that would benefit from further research.

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