Learning from Australian experience

I have noted previously in this blog that Australian experience can inform the world as to the potential outcomes from policy initiatives. Today, a new paper by Berkeley economists Ryan Kellogg and Hendrick Wolff examine whether US plans to extend daylight savings by one month will really lead to reductions in energy consumption. The use the Australian experiment with daylight saving extensions at the 2000 Olympics to test this theory.

Here is their abstract:

Rising energy prices and environmental concerns are driving countries to consider extending Daylight Saving Time (DST) in order to conserve energy. Beginning in 2007, the U.S. will lengthen DST by one month with the specific goal of reducing electricity consumption by 1%. In this paper we question the findings of prior DST studies, which often rely on simulation models and extrapolation rather than empirical evidence. By contrast, our research exploits a quasi-experiment, in which parts of Australia extended DST by two months to facilitate the Sydney Olympic Games in 2000. Using detailed panel data on halfhourly electricity consumption, prices, and weather conditions, we show that the extension failed to reduce electricity demand. We further examine prior DST studies and find that the most sophisticated simulation model available in the literature significantly overstates electricity savings when it is applied to the Australian data. These results suggest that current plans and proposals to extend DST will fail to conserve energy.

Sounds like it might be a little too late to stop the US policy though so I guess another experiment will be available for researchers soon.

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