How does Renewable Energy affect life in Rural Communities? Evidence from a field experiment with Markov process in Honduras

Abstract

This paper conducts a questionnaire-based field study to assess the perceived impact of rural electrification through renewable energy in Honduras. We collect data from 68 households from three rural communities in La Muralla National Park (Olancho, Honduras). Each community represents a different electrification context: El Díptamo is already electrified, El Empedrado is partially electrified and close to El Díptamo, and Las Manzanas is the more remote and less electrified community. The objective of the study is twofold: first, to understand the importance of electricity for each community in different social aspects, and second, to study the influence of electricity over time using Markov transition probability matrices. The results show that life in rural communities is highly positively affected by electricity, especially in households with longer access to electricity. More specifically, we find that perceptions of how access to electricity affects life characteristics such as health, education, work, safety, and household life do not differ across communities. Moreover, analysis of the transition probability matrices shows that the strongest differences are found in the transition from past to present. Such differences suggest the presence of spillover effects of energy access between electrified and non-electrified households over time. The matrices are instead similar in terms of probabilities between the present and the future; such similarities across communities in perceptions of future time trends may be driven by a sense of hope that access to electricity will reach all communities in the next years.