Rural Electrification and Income Growth; Some Experience from Tanzania

This study explores the influence of rural electrification on household incomes in Tanzania, analysing data from 276 electrified and 426 non-electrified households. Using the propensity score matching, results show that electrification increases the income of electrified households by 29.8%–36.9% compared to that of non-electrified households, with statistical significance at the 5% level. However, the sensitivity test at Γ (gamma) = 1.35; p -value .036191, suggests the results may be affected by unobserved selection bias. While causality isn’t claimed, there is a clear, positive relationship between rural electrification and income. The study concludes that funding the programme through subsidization is a reasonable public resource expenditure choice.