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

Author

Listed:
  • 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.

Suggested Citation

  • Matthew J. Kotchen & Laura E. Grant, 2011. "Does Daylight Saving Time Save Energy? Evidence from a Natural Experiment in Indiana," The Review of Economics and Statistics, MIT Press, vol. 93(4), pages 1172-1185, November.
  • Handle: RePEc:tpr:restat:v:93:y:2011:i:4:p:1172-1185
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    References listed on IDEAS

    as
    1. Lisa A. Kramer & Mark J. Kamstra & Maurice D. Levi, 2000. "Losing Sleep at the Market: The Daylight Saving Anomaly," American Economic Review, American Economic Association, vol. 90(4), pages 1005-1011, September.
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    5. 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.
    6. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    7. Daniel S. Hamermesh & Caitlin Knowles Myers & Mark L. Pocock, 2006. "Time Zones As Cues For Coordination: Latitude, Longitude, And Letterman," Middlebury College Working Paper Series 0609, Middlebury College, Department of Economics.
    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. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Daylight Saving Time Is Bad For Your Health
      by Jennifer Welsh and Chelsea Harvey in Business Insider on 2014-10-31 22:14:00

    Citations

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    Cited by:

    1. repec:eee:ecmode:v:70:y:2018:i:c:p:390-400 is not listed on IDEAS
    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. Daniela Marshall, 2010. "El Consumo Eléctrico Residencial en Chile en 2008," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 47(135), pages 57-89.
    4. Verdejo, Humberto & Becker, Cristhian & Echiburu, Diego & Escudero, William & Fucks, Emiliano, 2016. "Impact of daylight saving time on the Chilean residential consumption," Energy Policy, Elsevier, vol. 88(C), pages 456-464.
    5. Havranek, Tomas & Herman, Dominik & Irsova, Zuzana, 2016. "Does Daylight Saving Save Energy? A Meta-Analysis," MPRA Paper 74518, University Library of Munich, Germany.
    6. Klein, Daniel R. & Olonscheck, Mady & Walther, Carsten & Kropp, Jürgen P., 2013. "Susceptibility of the European electricity sector to climate change," Energy, Elsevier, vol. 59(C), pages 183-193.
    7. Jin, Lawrence & Ziebarth, Nicolas R., 2015. "Does Daylight Saving Time Really Make Us Sick?," IZA Discussion Papers 9088, Institute for the Study of Labor (IZA).
    8. Jin, L. & Ziebarth, N.R., 2015. "Sleep and Human Capital: Evidence from Daylight Saving Time," Health, Econometrics and Data Group (HEDG) Working Papers 15/27, HEDG, c/o Department of Economics, University of York.
    9. Herber, Stefanie P. & Quis, Johanna Sophie & Heineck, Guido, 2017. "Does the transition into daylight saving time affect students’ performance?," Economics of Education Review, Elsevier, vol. 61(C), pages 130-139.
    10. 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.
    11. Markus Schaffner & Jayanta Sarkar & Benno Torgler & Uwe Dulleck, 2015. "The Implications of Daylight Saving Time: A Field Experiment on Cognitive Performance and Risk Taking," QuBE Working Papers 030, QUT Business School.
    12. 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.
    13. 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).
    14. Crowley, Sara & FitzGerald, John & Malaguzzi Valeri, Laura, 2014. "Changing Time: Possible Effects on Peak Electricity Generation," Papers WP486, Economic and Social Research Institute (ESRI).
    15. Shaffer, Blake, 2017. "Location matters: daylight saving time and electricity use," MPRA Paper 84053, University Library of Munich, Germany.
    16. William Michelson, 2011. "Sleep Time: Media Hype vs. Diary Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 101(2), pages 275-280, April.
    17. Robert Hahn & Robert D. Metcalfe & David Novgorodsky & Michael K. Price, 2016. "The Behavioralist as Policy Designer: The Need to Test Multiple Treatments to Meet Multiple Targets," Experimental Economics Center Working Paper Series 2016-05, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
    18. Kountouris, Yiannis & Remoundou, Kyriaki, 2014. "About time: Daylight Saving Time transition and individual well-being," Economics Letters, Elsevier, vol. 122(1), pages 100-103.
    19. Jennifer L. Doleac & Nicholas J. Sanders, 2012. "Under the Cover of Darkness: Using Daylight Saving Time to Measure How Ambient Light Influences Criminal Behavior," Discussion Papers 12-004, Stanford Institute for Economic Policy Research.
    20. repec:eee:eneeco:v:66:y:2017:i:c:p:247-260 is not listed on IDEAS
    21. Hancevic, Pedro & Margulis, Diego, 2016. "Daylight saving time and energy consumption: The case of Argentina," MPRA Paper 80481, University Library of Munich, Germany.
    22. Sexton, Alison L. & Beatty, Timothy K.M., 2014. "Behavioral responses to Daylight Savings Time," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 290-307.
    23. Bergland, Olvar & Mirza, Faisal, 2017. "Latitudinal Effect on Energy Savings from Daylight Savings Time," Working Paper Series 08-2017, Norwegian University of Life Sciences, School of Economics and Business.

    More about this item

    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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