Lighting Up Rural India: A Crude Analysis

http://money.cnn.com/magazines/business2/business2_archive/2006/12/01/8394996/index.htm?postversion=2007030120

In class, and in homework, we have defined an externality as a by-product of a transaction between two parties. In the case of my article, I would say that the transaction is between the company Selco India, and the poor people of the rural community. The externalities are positive ones, and come in various forms, which I will discuss.
However, the company Selco India is not a corporation. It is rather a company whose target is still to earn profits, but whose goal is to help the poor. This is what is meant by "tapping an undesirable market."
Now, for the spill-over benefits. These can be equated to positive externalities, as in, they are one and the same.
The positive externalities that I have identified from the article are;
- increased study time for the children of rural communities;
- better productivity of the rose pickers, as they can now use both hands to pick roses;
- more earnings due to the better productivity, but also to increased entrepreneurialism;
- fewer fumes from the gas lamps;
all due to the increased lighting gained from the solar panels.

However, the spill-over benefits also include 'business experience', as I like to name it. Dealing with people living on less than $4 a day means that "innovative financial transactions" are called for - an innovative way to allow poor people to take out a loan. This can then be taken into other situations, and used as a role-model for doing business with the less privileged.
Also, the idea is also being implemented in the US now. Labelling this a spill-over benefit assumes that the transaction does society good. In fact it does; solar energy is better than nuclear energy.

I also like the little rickshaw owner's anecdote. It shows clearly the infinite entrepreneurialism that exists in society, and how an idea, like the one that Selco India have, can have such a profound effect on so many people.

Finally, there are a few things I am worried about. Firstly, I am not sure whether increased European demand for solar energy is relevant or not. And secondly, I am not sure where to start graphing.