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The Light and the Heat: Productivity Co-benefits of Energy-saving Technology

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  • Achyuta Adhvaryu
  • Namrata Kala
  • Anant Nyshadham

Abstract

Measurement of the full costs and benefits of energy-saving technologies is often difficult, confounding adoption decisions. We study consequences of the adoption of energy-efficient LED lighting in garment factories around Bangalore, India. We combine daily production line-level data with weather data and estimate a negative, nonlinear productivity-temperature gradient. We find that LED lighting, which emits less heat than conventional bulbs, decreases the temperature on factory floors, and thus raises productivity, particularly on hot days. Using the firm’s costing data, we estimate the pay-back period for LED adoption is nearly one-sixth the length after accounting for productivity co-benefits.

Suggested Citation

  • Achyuta Adhvaryu & Namrata Kala & Anant Nyshadham, 2018. "The Light and the Heat: Productivity Co-benefits of Energy-saving Technology," NBER Working Papers 24314, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:24314
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    2. Sharma, Smriti & Tarp, Finn, 2018. "Does managerial personality matter? Evidence from firms in Vietnam," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 432-445.
    3. Zhang, Peng & Deschenes, Olivier & Meng, Kyle & Zhang, Junjie, 2018. "Temperature effects on productivity and factor reallocation: Evidence from a half million chinese manufacturing plants," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 1-17.
    4. Riccardo Colacito & Bridget Hoffmann & Toan Phan, 2019. "Temperature and Growth: A Panel Analysis of the United States," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 51(2-3), pages 313-368, March.
    5. E. Somanathan & Rohini Somanathan & Anant Sudarsan & Meenu Tewari, 2014. "The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing," Working Papers id:6308, eSocialSciences.
    6. Miria A. Pigato, 2019. "Fiscal Policies for Development and Climate Action," World Bank Publications, The World Bank, number 31051.
    7. Bonan, Jacopo & Pareglio, Stefano & Tavoni, Massimo, 2017. "Access to modern energy: a review of barriers, drivers and impacts," Environment and Development Economics, Cambridge University Press, vol. 22(5), pages 491-516, October.
    8. Cai, Xiqian & Lu, Yi & Wang, Jin, 2018. "The impact of temperature on manufacturing worker productivity: Evidence from personnel data," Journal of Comparative Economics, Elsevier, vol. 46(4), pages 889-905.
    9. Lichter, Andreas & Pestel, Nico & Sommer, Eric, 2017. "Productivity effects of air pollution: Evidence from professional soccer," Labour Economics, Elsevier, vol. 48(C), pages 54-66.
    10. Fu, Shihe & Viard, Brian & Zhang, Peng, 2017. "Air Quality and Manufacturing Firm Productivity: Comprehensive Evidence from China," MPRA Paper 78914, University Library of Munich, Germany.
    11. Francesco Lamperti & Giovanni Dosi & Mauro Napoletano & Andrea Roventini & Alessandro Sapio, 2018. "And then he wasn't a she : Climate change and green transitions in an agent-based integrated assessment model," Sciences Po publications 28, Sciences Po.
    12. Massimo Filippini & Suchita Srinivasan, 2019. "Investments in Worker Health and Labor Productivity: Evidence from Vietnam," CER-ETH Economics working paper series 19/326, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    13. Pascaline Dupas & Edward Miguel, 2016. "Impacts and Determinants of Health Levels in Low-Income Countries," NBER Working Papers 22235, National Bureau of Economic Research, Inc.
    14. Garg, Teevrat & Jagnani, Maulik & Taraz, Vis P., 2017. "Human Capital Costs of Climate Change: Evidence from Test Scores in India," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258018, Agricultural and Applied Economics Association.
    15. Achyuta Adhvaryu & James Fenske & Namrata Kala & Anant Nyshadham, 2015. "Fetal origins of mental health: evidence from Africa," CSAE Working Paper Series 2015-15, Centre for the Study of African Economies, University of Oxford.
    16. Smriti Sharma & Christophe Nordman, 2018. "Pecuniary returns to working conditions in Vietnam," WIDER Working Paper Series 72, World Institute for Development Economic Research (UNU-WIDER).
    17. Christophe J. Nordman & Smriti Sharma, 2018. "Pecuniary returns to working conditions in Vietnam," WIDER Working Paper Series wp-2018-72, World Institute for Development Economic Research (UNU-WIDER).
    18. Colmer, Jonathan, 2018. "Weather, labor reallocation and industrial production: evidence from India," LSE Research Online Documents on Economics 88695, London School of Economics and Political Science, LSE Library.
    19. E. Somanathan & Rohini Somanathan & Anant Sudarshan & Meenu Tewari, 2021. "The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing," Journal of Political Economy, University of Chicago Press, vol. 129(6), pages 1797-1827.
    20. Jonathan Colmer, 2018. "Temperature, labor reallocation and industrial production: evidence from India," CEP Discussion Papers dp1544, Centre for Economic Performance, LSE.
    21. Geoffrey Heal & Jisung Park, 2015. "Goldilocks Economies? Temperature Stress and the Direct Impacts of Climate Change," NBER Working Papers 21119, National Bureau of Economic Research, Inc.
    22. Sharma, Smriti & Tarp, Finn, 2018. "Does managerial personality matter? Evidence from firms in Vietnam," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 432-445.
    23. Francesco Lamperti & Valentina Bosetti & Andrea Roventini & Massimo Tavoni, 2019. "The public costs of climate-induced financial instability," LEM Papers Series 2019/42, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    24. Geoffrey Heal & Jisung Park, 2016. "Editor's Choice Reflections—Temperature Stress and the Direct Impact of Climate Change: A Review of an Emerging Literature," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(2), pages 347-362.
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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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