The economics of daylight saving time

The economics of daylight saving time

It was Benjamin Franklin who (sort of) came up with the idea of daylight saving time (DST) in a whimsical anonymous essay to the Journal of Paris in 1784. He calculated the amount of wax and tallow that could be saved if Parisians woke before sunset instead of at noon. He did not suggest adjusting clocks, but he did have “ingenious” solutions for inducing Parisians to rise early, such as taxing windows with shutters, limiting the number of candles allotted to each family, stopping all coaches except those of doctors after sunset and ringing church bells at sunrise.

His idea finally gained recognition in the 20th century, and right now 76 countries including Turkey are using DST. Until recently, it was assumed, without much empirical evidence, that DST saved energy, although the few existing studies offered conflicting results. Economists Matthew Kotchen and Laura Grant were able to reach a definite conclusion in a 2008 paper.

The two economists took advantage of the fact that the state of Indiana instituted DST statewide only in 2006; before that year, very few counties were practicing it. They compared “the amount of electricity used by households in the late-adopting counties during the two years before they switched to DST with the amounts they used during the year afterward - while using counties that always practiced DST as a control group.”

Lo and behold, they found that DST increased residential electricity demand by roughly 1 percent, with the highest increase in consumption taking place in late summer and early fall. It wasn’t that Franklin’s intuition was wrong. DST did cause savings on electricity used for household lighting, which were more than offset by more AC usage. A study for Australia, using a similar methodology, reached the same conclusion.

However, DST may have other, indirect benefits that may justify its use. An academic study found that it is associated with lower crime, whereas another showed that more daylight induces people to spend more time outdoors, as opposed to being a couch potato, and results in 10 percent more calories burned. On the other hand, there is quite a bit of evidence that adjusting mechanical or electronic clocks disrupt our biological clocks and result in sleep deprivation. As a result, recent papers have linked DST to work-related injuries, especially in the mining and construction sectors, fatal car crashes and even heart attacks as well as other health problems.

Even if you don’t work in mining and construction, are healthy and make sure that you don’t drive right after the move to DST, you may still be vulnerable. A study by two management professors showed that workers tend to waste time in front of their computers at a substantially higher rate on the Monday following the shift to DST than other Mondays.

Combining most of these different effects (but not car accidents or injuries in other sectors), the website calculated the total cost of DST to the U.S. economy to be $434 million in 2013. They also went through the math for 300 cities and towns and found costs per person to be generally higher in the east than the west.

I won’t complain. Since cemeteries close at sunset, thanks to DST, I was able to visit my friend Esther after a full day of meetings in Washington D.C., but I wonder why we are still stuck with DST if it brings more harm than good.