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The welfare effects of time reallocation: evidence from Daylight Saving Time

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  • Costa-Font, Joan
  • Fleche, Sarah
  • Pagan, Ricardo

Abstract

Daylight Saving Time (DST) is a widely adopted practice implemented by over 70 countries to align sunlight with day-to-day activities and reduce energy demands. However, we do not have a clear knowledge of how it affects individuals' welfare. Using a regression discontinuity combined with a difference-in-differences design, we find that the Spring DST transition causes a significant decline in life satisfaction. By inducing a reallocation of time, the transition into DST deteriorates sleep quality and increases time stress, which in turn affects physical and emotional health. Using an event study approach, we find that such effects persist for about six days after the DST transition. Conversely, we provide evidence that the Autumn DST transition gives rise to a significant increase in life satisfaction. Finally, using a simple cost-benefit analysis, we discuss the potential benefits of ending DST.

Suggested Citation

  • Costa-Font, Joan & Fleche, Sarah & Pagan, Ricardo, 2024. "The welfare effects of time reallocation: evidence from Daylight Saving Time," LSE Research Online Documents on Economics 120819, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:120819
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    Cited by:

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    3. Depalo, Domenico, 2023. "Should the Daylight Saving Time be abolished? Evidence from work accidents in Italy," Economic Modelling, Elsevier, vol. 128(C).

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    More about this item

    Keywords

    daylight saving time; wellbeing; health; sleep; time; stress;
    All these keywords.

    JEL classification:

    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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