|Figure 1 Consumer Surplus for Lighting|
The concept of consumer surplus in measuring the benefits of rural electrification continues to be
misunderstood by many people. In this posting, I try to address some of those misperceptions. The main point is that consumer surplus is really a shortcut way to measure social and economic benefits. People purchase kerosene to use in lamps, and then in turn use the light from those lamps for various activities they want to do. Likewise, households purchase electricity to produce light, and this permits an even wider variety of evening activities in the households. People know that electric lights over the short and long term might result in increased education, improved productivity, better ability to host social gatherings and other benefits.
The slightly modified quote below is from Chapter 9 of Electric Power for Rural Growth, and it discusses the evolution of the way benefits of rural electrification have been measured over the years.