AN ANALYSIS OF ENERGY AND INCOME TRENDS FOLLOWING RURAL ELECTRIFICATION IN THE STATE OF BAHIA, BRAZIL Martin Obermaier, PPE/COPPE/UFRJ, Phone +55 (21) 2562-8760, E-mail [email protected] Overview Brazil has made considerable efforts to increase electrification levels among the rural poor during the past years. However, as development analysts frequently point out, electricity access is no commodity itself which can help decrease poverty. Rather than that, the value of electricity for, say, a rural family is only derived from the demand for the goods or services electricity provides or makes possible. Successful electrification programs must thus simultaneously tackle the issues of (1) universalizing access and (2) enabling consumers to increase their consumption. Such an observation implicitly takes into account rural equity considerations, as all new electricity consumers ought to benefit from a new connection, and not only rural elites or large-scale users. Today much research is available on the potential benefits of rural electrification, but little empirical work has been carried out to validate these. This paper presents a contribution to the latter field of research by analyzing the distributional trends of electricity consumption and income following rural electrification in the State of Bahia, Brazil. Methods I estimate simple non-parametric density curves to analyze how electricity consumption and income develop after rural households have received access to electricity. The data is taken from a recent panel survey covering 268 rural families in Bahia over the time of three years. Results In general the analysis of the data shows that (1) rural consumers tend to take up electricity consumption following rural electrification, and that (2) low consumption levels decrease in favor of higher consumption levels. Results are less clear regarding rural income: while median family income increases, low per capita incomes become more frequent at the end of the survey period. On any account, due to the limited time covered by the data set it is not possible to establish a direct relationship between electricity consumption and income generation. Conclusions Based on panel survey data from 268 rural Brazilian families, my analysis shows that electricity consumption and at least family income increase and become more equally distributed in the years following rural electrification. Most changes, however, occur only on a small scale. These results may seem disappointing, but as the incremental benefits of one additional kWh or dollar are generally considered to be higher for the poor, the significance of these findings should not be underrated. References CEPEL, “Impar: Sistema de avaliação dos impactos rurais,” CD Rom, Eletrobras, Rio de Janeiro, 2006. 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