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Does Daylight Saving Time Save Energy? Evidence from a Natural Experiment in Indiana

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  • Matthew J. Kotchen

    (Yale University and NBER)

  • Laura E. Grant

    (University of California, Santa Barbara)

Abstract

We take advantage of a natural experiment in the state of Indiana to estimate the effect of daylight saving time (DST) on residential electricity consumption. Our main finding is that, contrary to the policy's intent, DST increases electricity demand. The findings are consistent with simulation results that identify a trade-off between reducing demand for lighting and increasing demand for heating and cooling. We estimate a cost to Indiana households of $9 million per year in increased electricity bills. We also estimate social costs of increased pollution emissions between $1.7 to $5.5 million per year. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 93 (2011)
Issue (Month): 4 (November)
Pages: 1172-1185

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Handle: RePEc:tpr:restat:v:93:y:2011:i:4:p:1172-1185

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  1. Kamstra, M.J. & Kramer, L.A. & Levi, M.D., 1998. "Losing Sleep at the Market: The Daylight-Savings Anomaly," Discussion Papers dp98-04, Department of Economics, Simon Fraser University.
  2. Shimoda, Yoshiyuki & Asahi, Takahiro & Taniguchi, Ayako & Mizuno, Minoru, 2007. "Evaluation of city-scale impact of residential energy conservation measures using the detailed end-use simulation model," Energy, Elsevier, vol. 32(9), pages 1617-1633.
  3. Kellogg, Ryan & Wolff, Hendrik, 2008. "Daylight time and energy: Evidence from an Australian experiment," Journal of Environmental Economics and Management, Elsevier, vol. 56(3), pages 207-220, November.
  4. Daniel S. Hamermesh & Caitlin Knowles Myers & Mark L. Pocock, 2006. "Time Zones as Cues for Coordination: Latitude, Longitude, and Letterman," NBER Working Papers 12350, National Bureau of Economic Research, Inc.
  5. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
  6. Peter C. Reiss & Matthew W. White, 2003. "Demand and Pricing in Electricity Markets: Evidence from San Diego During California's Energy Crisis," NBER Working Papers 9986, National Bureau of Economic Research, Inc.
  7. Matthew J. Kotchen & Michael R. Moore & Frank Lupi & Edward S. Rutherford, 2006. "Environmental Constraints on Hydropower: An Ex Post Benefit-Cost Analysis of Dam Relicensing in Michigan," Land Economics, University of Wisconsin Press, vol. 82(3), pages 384-403.
  8. Mark J. Kamstra & Lisa A. Kramer & Maurice D. Levi, 2002. "Losing Sleep at the Market: The Daylight Saving Anomaly: Reply," American Economic Review, American Economic Association, vol. 92(4), pages 1257-1263, September.
  9. Aries, Myriam B.C. & Newsham, Guy R., 2008. "Effect of daylight saving time on lighting energy use: A literature review," Energy Policy, Elsevier, vol. 36(6), pages 1858-1866, June.
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Cited by:
  1. Krarti, Moncef & Hajiah, Ali, 2011. "Analysis of impact of daylight time savings on energy use of buildings in Kuwait," Energy Policy, Elsevier, vol. 39(5), pages 2319-2329, May.
  2. Felix Weinhardt, 2013. "The Importance of Time Zone Assignment: Evidence from Residential Electricity Consumption," SERC Discussion Papers serddp0126, Spatial Economics Research Centre, LSE.
  3. Kountouris, Yiannis & Remoundou, Kyriaki, 2014. "About time: Daylight Saving Time transition and individual well-being," Economics Letters, Elsevier, vol. 122(1), pages 100-103.
  4. William Michelson, 2011. "Sleep Time: Media Hype vs. Diary Data," Social Indicators Research, Springer, vol. 101(2), pages 275-280, April.
  5. Jennifer L. Doleac & Nicholas J. Sanders, 2012. "Under the Cover of Darkness: Using Daylight Saving Time to Measure How Ambient Light Influences Criminal Behavior," Working Papers 126, Department of Economics, College of William and Mary.
  6. Hill, S.I. & Desobry, F. & Garnsey, E.W. & Chong, Y.-F., 2010. "The impact on energy consumption of daylight saving clock changes," Energy Policy, Elsevier, vol. 38(9), pages 4955-4965, September.
  7. Wolff, Hendrik & Makino, Momoe, 2012. "Extending Becker's Time Allocation Theory to Model Continuous Time Blocks: Evidence from Daylight Saving Time," IZA Discussion Papers 6787, Institute for the Study of Labor (IZA).

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