Long-Distance Electricity Transmission and Agricultural Productivity Growth: Evidence From China

This study examined the effect of the West-to-East Electricity Transmission Project in China on agricultural productivity. The project transmits electricity from the resource-rich west to the consumer-dense east. Using a Difference-in-Differences approach, we found that the project increased county-level agricultural productivity by about USD 509.5 per person. This increase results from advances in agricultural technological progress and the development of the agricultural industry. Farmer adaptation to improved electricity supply also contributed, such as expanded irrigation, greater land allocation to water-intensive crops, higher replanting indices, and larger-scale operations. The project has also raised grain yields and farmers’ disposable incomes, while reducing the agricultural labor force. Only electricity transmission, not natural gas or oil, had a positive and significant effect on agricultural productivity. These results support compelling evidence for investing in large-scale transregional electricity transmission infrastructure worldwide.