Upcoming TREE Seminar: Dr. Meera Mahadevan (UCSB)

Date & Time: Thursday, October 31st, 3:15-4:45 PM

Location: Cox Multipurpose Room, RTI International

Please join us for the next Triangle Resources and Environmental Economics (TREE) Seminar. The TREE Seminar Series, an ongoing forum co-sponsored by RTI International, Duke University, and the Center for Environmental and Resource Economic Policy (CEnREP), brings researchers from around the country to the Triangle to discuss a variety of economic and policy-based solutions to many of today’s most pressing environmental challenges. All students, faculty, and staff are welcome to attend. This week features the following presentation:

Dr. Meera Mahadevan, Postdoctoral Fellow, emLab, University of California, Santa Barbara
“The Price of Power: Costs of Political Corruption in Indian Electricity”

Abstract: Political capture of public electricity provision may benefit targeted consumers through informal subsidies. However, this causes leakages in utility revenues, inhibiting their ability to reliably supply electricity to the broader consumer base. Using a close-election regression discontinuity design, and a confidential dataset on the universe of geo-coded electricity bills from a large state in India, I show that billed electricity consumption is lower for constituencies of the winning party after an election. However, actual consumption, as measured by satellite nighttime lights, is higher for these regions. I find new evidence to explain this discrepancy – politicians illicitly subsidize their constituents by systematically allowing the manipulation of electricity bills. To measure changes in welfare, I develop a method to estimate demand elasticities in the presence of data manipulation, by leveraging exogenous variation from policy-led price changes and predictive analytics. The net deadweight loss I estimate is large enough to power 3.7 million rural households over an electoral term.