When Aid Substitutes for Self-Insurance: Solar Public Goods and Household Hedging in Pakistan

Huang, Shuyan (Michael)

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https://hdl.handle.net/2142/133326 Copy

Description

Title

When Aid Substitutes for Self-Insurance: Solar Public Goods and Household Hedging in Pakistan

Author(s)

Huang, Shuyan (Michael)

Issue Date

2026-04-15

Keyword(s)

• household solar adoption
• solar aid
• state capacity
• Pakistan

Date of Ingest

2026-05-24T08:02:21-05:00

Abstract

Foreign aid increasingly finances renewable energy infrastructure in developing countries, yet little is known about how such investments affect household adoption of clean technologies. This paper examines whether solar aid promotes or crowds out household solar adoption in Pakistan, where rooftop solar has expanded largely as a response to unreliable grid electricity. I combine household-level data from the 2024–25 Pakistan Household Integrated Economic Survey (HIES) with geocoded solar aid project data from the Geocoded Official Development Assistance Dataset (GODAD). To address the non-random allocation of aid, I employ a shift–share instrumental variable that interacts donor-specific historical district allocation shares with donor-year global renewable aid supply shocks. The results show that solar aid reduces the probability that households adopt solar in combination with the grid, while having no significant effect on solar-only or grid-only reliance. These findings suggest that solar aid can substitute for private solar investment when households adopt rooftop systems primarily as a hedge against unreliable public electricity provision, highlighting how the effects of renewable aid depend on the institutional context shaping household energy decisions.

Type of Resource

Presentation slides

Genre of Resource

conference paper

Language

eng

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