Lessons from the Tennessee Valley Authority

Abstract

This dissertation is a program evaluation of the Tennessee Valley Authority (TVA) the largest publicly owned utility in the United States. The first essay in this dissertation examines the TVA's use of eminent domain in order to acquire property for the construction of reservoirs. It develops a new model of asymmetric information and then tests the model predictions using property level data from TVA property purchases in the 1930's.The second essay of this dissertation examines the unintended consequences of reservoir development my examining changes in the malaria rate associated with TVA reservoirs. Using panel data methods, I find that the presence of a TVA reservoir leads to large increases in the malaria mortality and morbidity rate, which cost up to 30 percent of TVA federal appropriations. The final essay in this dissertation examines the impact of TVA electrification programs on economic growth. It combines archival and panel data methods to show that contrary to the historical account, TVA electric rates did not differ substantially from the rates charged by private utilities, and secondly, shows that counties that had electricity contracts with the TVA did not have differential economic growth rates for a variety of economic outcomes. In order to control for selection into contracts, I adopt an instrumental variables strategy based on the cost of electric service.