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

Abstract

The history of Daylight Saving Time (DST) has been long and controversial. Throughout its implementation during World Wars I and II, the oil embargo of the 1970s, consistent practice today, and recent extensions, the primary rationale for DST has always been to promote energy conservation. Nevertheless, there is surprisingly little evidence that DST actually saves energy. This paper takes advantage of a natural experiment in the state of Indiana to provide the first empirical estimates of DST effects on electricity consumption in the United States since the mid-1970s. Focusing on residential electricity demand, we conduct the first-ever study that uses micro-data on households to estimate an overall DST effect. The dataset consists of more than 7 million observations on monthly billing data for the vast majority of households in southern Indiana for three years. Our main finding is that-contrary to the policy's intent-DST increases residential electricity demand. Estimates of the overall increase are approximately 1 percent, but we find that the effect is not constant throughout the DST period. DST causes the greatest increase in electricity consumption in the fall, when estimates range between 2 and 4 percent. These findings are consistent with simulation results that point to a tradeoff between reducing demand for lighting and increasing demand for heating and cooling. We estimate a cost of increased electricity bills to Indiana households of $9 million per year. We also estimate social costs of increased pollution emissions that range from $1.7 to $5.5 million per year. Finally, we argue that the effect is likely to be even stronger in other regions of the United States.

Spring Forward at Your Own Risk: Daylight Saving Time and Fatal Vehicle Crashes

“…However, recent research demonstrates that DST does not save energy and could possibly increase energy use (Kellogg andWolff 2008, Kotchen andGrant 2011). Despite mounting evidence that DST fails in its primary goal, some form of Daylight Saving Time is still practiced by over 1.5 billion people globally.…”

“…They find that while DST reduces energy demand in the evening, it increases demand in the morning with no significant net effect. Kotchen and Grant (2011) make use of a quasi-experiment in Indiana where some Southern Indiana counties did not practice DST until 2006. Their work suggests that DST could actually increase residential energy use, as increased heating and cooling use more than offset the savings from reduced lighting use.…”

Time zone lines and suicides: west side story

“…But is this sunlight "trigger" conclusion fully justified? 6 This paper suggests that the sunlight per se might not be causal. For the cultural and emotional associations of summer are arguably similar throughout the OECD countries, and thus a cross-sectional survey cannot control for this.…”

Congress and the Political Economy of Daylight Saving Time, 1918–1985

“…As DST is a contentious topic and affects people's lives, it has generated a fair amount of academic research. Economists have taken the lead, studying the effects of DST on energy usage (Kotchen and Grant, ), safety (Coate and Markowitz, ; Sullivan and Flannagan, ; Coren, , ), health (Kantermann et al., ), economic coordination (Hammermesh, Myers, and Pocock, ), and stock market performance (Kamstra, Kramer, and Levi, , ; Pinegar, ). Political scientists, on the other hand, have virtually ignored the political aspects of DST, such as the determinants of DST legislation.…”