||Since the 1990s, the Kingdom of Bhutan has made significant investments to achieve
universal rural electrification (RE), with goals to improve education, health and
employment outcomes and reduce fuelwood consumption. While planners expect that improved
energy access generally enhances well-being, previous assessments of RE programs find
highly varied, context-dependent impacts. To assess the impact of RE in Bhutan, I
rely on survey data from three rounds of the Bhutan Living Standards Survey. Applying
linear and non-linear regression methods as well as propensity score matching, I find
that the RE program led to improvements in education and reduced fuelwood consumption.
I find inconclusive evidence of the effects of RE on non-agricultural employment and
find no effect on health. I conduct a cost-benefit analysis (CBA) to compare program
costs, at both the government and household levels, against estimated benefits. Household
level benefits outweigh costs, and the positive net benefits are robust to variation
in multiple, estimated parameters. Societal net benefits are slightly negative, but
this value is likely a lower bound estimate and is sensitive to parameter variation.
Based on these analyses, I conclude that Bhutan’s RE program was a partial success
in the time period studied, achieving fuelwood and education related outcomes and
improving welfare in rural households.