Even if you hate daylight saving time, you tell yourself: Hey, I shouldn’t be so selfish, it’s good for the economy, or for the environment, or for farmers, or something. Right?
Well, um, perhaps not. Consider a new working paper, “Does Daylight Saving Time Save Energy? Evidence From a Natural Experiment in Indiana,” by Matthew J. Kotchen and Laura E. Grant:
The history of daylight saving time (D.S.T.) has been long and controversial. Throughout its implementation during World Wars I and II, the oil embargo of the 1970’s, consistent practice today, and recent extensions, the primary rationale for D.S.T. has always been to promote energy conservation.
Nevertheless, there is surprisingly little evidence that D.S.T. actually saves energy. This paper takes advantage of a natural experiment in the state of Indiana to provide the first empirical estimates of D.S.T. effects on electricity consumption in the United States since the mid-1970’s.
Focusing on residential electricity demand, we conduct the first-ever study that uses micro-data on households to estimate an overall D.S.T. 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 — D.S.T. increases residential electricity demand.
Estimates of the overall increase are approximately 1 percent, but we find that the effect is not constant throughout the D.S.T. period. D.S.T. 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.
On the bright side, if President-elect Obama is looking for some quick hits on energy conservation, here’s one that’s all teed up and ready to go: Kill D.S.T.!