How will the improvements of electricity supply quality in poor regions reduce the regional economic gaps? A case study of China

Abstract

Electricity supply quality (ESQ) is critical for healthy economic production, and regional differences in ESQ can widen economic development gaps. To contribute to a more equitable regional development, this study first develops a Gini index of ESQ distribution to measure the inequality among different cities. Then, an econometric model based on the Cobb–Douglas production function is established to quantify the effects of ESQ on regional economy. Finally, we estimate the impacts of ESQ improvement on reducing the economic inequality. The main results show that: (1) Substantial differences exist among the regional ESQ, and the national GDP-based ESQ Gini index was 0.720 in 2018. (2) A GDP-based Lorenz curve has a higher Gini coefficient than the population-based one does, while inequalities in cites are greater than those in rural areas. (3) The ESQ has significant impacts on the regional economic output, and a 1% reduction in the ESQ will, on average, reduce the city-level output by 0.142%. (4) ESQ improvement can significantly narrow the economic gap by up to 24.9%, that is, the ESQ Gini index of GDP distribution will decrease from 0.329 to 0.247 according to our scenario designs.