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Cited by 466

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How Do Electricity Shortages Affect Industry? Evidence from India

Allcott, Hunt, Collard-Wexler, Allan, O'Connell, Stephen D.·2016·American Economic Review

Abstract

We estimate the effects of electricity shortages on Indian manufacturers, instrumenting with supply shifts from hydroelectric power availability. We estimate that India's average reported level of shortages reduces the average plant's revenues and producer surplus by 5 to 10 percent, but average productivity losses are significantly smaller because most inputs can be stored during outages. Shortages distort the plant size distribution, as there are significant economies of scale in generator costs and shortages more severely affect plants without generators. Simulations show that offering interruptible retail electricity contracts could substantially reduce the impacts of shortages. (JEL D24, L60, L94, O13, O14, Q41)

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Metadata

Authors
Allcott, H., Collard-Wexler, A., & O'Connell, S. D.
Venue
American Economic Review
Published
2016-03-01
Volume
106
Issue
3
Pages
587-624
ISSN
0002-8282 (ISSN-L)
OpenAlex
W2164812645
Cited by
466
References
50
FWCI
8.49
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: How Do Electricity Shortages Affect Industry? Evidence from India. https://app.cochat.ai/papers/10.1257/aer.20140389
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Allcott, H., Collard-Wexler, A., & O'Connell, S. D. (2016). How Do Electricity Shortages Affect Industry? Evidence from India. American Economic Review. https://doi.org/10.1257/aer.20140389

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