How Do Electricity Shortages A

  title={How Do Electricity Shortages A},
  author={Stephen D. O'Connell and Allan Collard-Wexler and Hunt Allcott},
Endemic blackouts are a particularly salient example of how poor infrastructure might reduce growth in developing economies. We study how electricity shortages affect all Indian manufacturers, using an instrument based on hydroelectricity production and a hybrid Leontief/Cobb-Douglas production function model. Shortages reduce average output by about five percent, but because most inputs can be stored during outages, productivity losses are much smaller. Plants without generators have much… CONTINUE READING