an analysis of energy and income trends following rural

Martin Obermaier, PPE/COPPE/UFRJ, Phone +55 (21) 2562-8760, E-mail [email protected]
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.
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.
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
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.
CEPEL, “Impar: Sistema de avaliação dos impactos rurais,” CD Rom, Eletrobras, Rio de Janeiro, 2006.
Dikhanov, Y., “Trends in global income distribution, 1970-2000, and scenarios for 2015,” Human Development
Report Office Occasional Paper 2005/8, UNDP, 2005.
Edward, P., “Examining inequality: who really benefits from global growth?,” World Development, vol. 34, pp.
1667–1695, 2006.
ESMAP, “Energy Services for the World's Poor. Energy and Development Report. Washington, D.C.: World
Bank, 2000.
ESMAP, “Maximizing the productive uses of electricity to increase the impact of rural electrification programs,”
formal Report 332/08, World Bank, Washington, D.C., 2008.
Foley, G., “Photovoltaic applications in rural areas of the developing world,” Energy Series Technical Paper
304, World Bank, Washington, D.C., 1995.
Goldemberg, J., E. L. La Rovere, and S. T. Coelho, “Expanding access to electricity in Brazil,” Energy for
Sustainable Development, vol. 8, pp. 86–94, 2004.
IBGE, Pesquisa Nacional por Amostra de Domicílios. Rio de Janeiro: IBGE, 2007.
IEA, World Energy Outlook 2004. Paris: IEA, OECD, 2004.
Jacobson, A., A. M. Milman, and D. M. Kammen, “Letting the (energy) Gini out of the bottle: Lorenz curves of
cumulative electricity consumption and Gini coefficients as metrics of energy distribution and equity,” Energy
Policy, vol. 33, pp. 1825–1832, 2005.
MME, ““Antes, lá em casa não tinha nada! Não tinha televisão, liquidicador, não tinha ... ”,” Informativo Luz
Para Todos no. 006, MME, Brasília, D.F., January, 2008.
Obermaier, M., “Rural electrification in Brazil: lessons from recent experience,” Master's thesis, Freie
Universität Berlin, Berlin, 2005.
Porcaro, J. and M. Takada, Achieving the Millennium Development Goals: The Role of Energy Services. New
York: UNDP, 2005.
Pre Dakar Position Paper, “Strategies to scale-up renewable energy market in Africa,” A position paper
developed by NGOs and other stakeholders for the International Conference on Renewable Energy in Africa, 1618 April 2008, Dakar, Senegal, Community Research and Development Centre, Benin, Nigeria, 2008.
R Development Core Team, R: A Language and Environment for Statistical Computing. Vienna: R Foundation
for Statistical Computing, 2006.
Ranganathan, V., “Rural electrification revisited,” Energy Policy, vol. 21, pp. 142–151, 1993.
Rodrigues, A. D. F., “Análise da viabilidade de alternativas de suprimento descentralizado de energia elétrica a
comunidades rurais de baixa renda com base em seu perfil de demanda,” Master's thesis, Programa de
Planejamento Energético (Energy Planning Program), COPPE/UFRJ, Rio de Janeiro, 2006.
Sala-i-Martin, X., “The world distribution of income (estimated from individual country distributions),” NBER
Working Paper no. 8933, NBER, Cambridge, 2002.
Schaeffer, R., C. Cohen, M. A. Almeida, C. C. Achão, and F. M. Cima, “Energia e pobreza: problemas de
desenvolvimento energético e grupos sociais marginais em áreas rurais e urbanas no Brasil,” Serie Recursos
Naturales e Infraestructura 60, CEPAL, Santiago de Chile, 2003.
WEC, Energy for Tomorrow's World – Acting Now! London: World Energy Council, 2000.