Economic Research Forum (ERF)

The benefits of year-round daylight saving time: evidence from Turkey

2090
Ever since Benjamin Franklin’s observation in the late eighteenth century that people wasted daylight by sleeping after sunrise and squandered wax by burning candles in the evening, energy conservation has been the main motivation for governments to follow ‘daylight saving time’ (DST). Using Turkey’s recent decision to extend DST to the whole year, this column summarises new evidence on how DST affects the consumption and generation of electricity, and related greenhouse gas emissions. The analysis suggests that while total consumption is unchanged, emissions may have gone down due to the policy change.

In a nutshell

After Turkey stopped turning back its clocks to standard time in October 2016, there has been neither an increase nor a decrease in the country’s energy consumption.

But there has been a strong intra-day redistributional effect of staying on daylight saving time all year round: while electricity consumption increases considerably in the morning, it decreases in the late afternoon and early evening.

The change in the intra-day distribution affects the fuel mix used for electricity generation, reducing the amount of electricity provided by coal- and gas-fired plants, and increasing electricity generation from renewable sources.

More than 70 countries follow daylight saving time (DST) in at least part of the country as a way to promote energy conservation and reduction of greenhouse gas emissions (Kellogg and Wolff, 2008; Choi et al, 2017). Moving the clock forward by one hour in the summer months (and reverting back to standard time in the winter months) creates an additional hour of daylight in the afternoon, which may shift people’s daily routine and hence reduce the demand for electricity (Aries and Newham, 2008).

While DST is widely used, it remains a subject of considerable controversy. The European Parliament, for example, recently called on the European Commission to conduct a thorough reassessment of the union-wide summer-time arrangement (Stearns, 2018).

Empirical research on this topic remains inconclusive about whether DST policy is an effective tool to reduce electricity consumption. For example, Belzer et al (2008) analyse the impact of a DST extension on national energy consumption in the United States: they estimate total electricity savings of about 0.5% per day of extended DST.

Similarly, studying the effect of DST on electricity consumption in southern Norway and Sweden, Mirza and Bergland (2011) find a 1% fall in annual energy demand for both countries.

In contrast, using a natural experiment in Indiana between 2004 and 2006 and data on household-level monthly consumption for over 200,000 residences, Kotchen and Grant (2011) find an overall increase in residential electricity use by about 1% due to DST. Other studies find a negligible effect of DST because evening reduction in demand for electricity is offset by increased electricity use in the morning (Kellogg and Wolff, 2008; Choi et al, 2017).

In a new study (Aksoy et al, 2019), we contribute to the body of evidence on DST policy and energy consumption by using a novel source of variation from Turkey. Having used DST continuously since the early 1980s, Turkey stopped turning back its clocks to standard time in October 2016 with the intention of making more use of daylight, effectively staying on DST all year round.

The exogenous change in the use of DST allows us to compare entire periods where winter time was implemented (November 2015 to March 2016) with those where it would have been applied if the policy change had not happened (October 2016 to March 2017).

In particular, we exploit the variation in energy consumption before and after the policy change as well as between hours affected and unaffected by DST to identify the impact of DST on hourly energy demand, using the analytical technique known as ‘difference-in-differences’.

We find that, overall, the policy change neither increases nor decreases energy consumption. But the results show that there is a strong intra-day redistributional effect of keeping summer time all year round: while electricity consumption increases considerably in the morning, it decreases in the late afternoon and early evening.

Besides having novel hourly data on electricity usage across the country, which covers both residential and industrial consumption, we collect information on sources of electricity production and average emission factors by fuel type for the Turkish electricity market.

Some studies have offered rough estimates for the environmental impact of DST by multiplying the estimated change in overall electricity consumption with emission rates of energy sources employed in the relevant electricity grid (Hill et al, 2010; Kotchen and Grant, 2011).

In contrast, we use the difference-in-differences technique to test directly how the one hour time shift influences electricity generation and social costs of emissions due to changes in the electricity load.

We find that the change in the intra-day load curve in turn affects the fuel mix used for electricity generation. In particular, the policy change significantly reduces the amount of electricity provided by coal- and gas-fired plants, especially during early morning hours. At the same time, electricity generation from renewable sources, such as hydro power, significantly increases.

This leads to a reduction in greenhouse gas emissions of about 36,560 tons per day. Hence, while the overall impact of the policy change on electricity use is negligible, it has important positive impacts on the distribution of the electricity load and therefore on Turkey’s electricity generation and greenhouse gas emissions.

Further reading

Aksoy, Cevat Giray, Çağatay Bircan and Elisa Wirsching (2019) ‘Daylight Saving All Year Round: Evidence from the Turkish Experiment’, mimeo.

Aries, Myriam, and Guy Newham (2008) ‘Effect of Daylight Saving Time on Lighting Energy Use: A Literature Review’, Energy Policy 36: 1858-66.

Belzer, David, Stanton Hadley and Shih-Miao Chin (2008) Impact of Extended Daylight Saving Time on National Energy Consumption, US Department of Energy.

Choi, Seungmoon, Alistair Pellen and Virginie Masson (2017) ‘How does Daylight Saving Time Affect Electricity Demand? An Answer Using Aggregate Data from a Natural Experiment in Western Australia’, Energy Economics 66: 247-60.

Franklin, Benjamin (1784) An Economical Project, Journal de Paris.

Hill, S, F Desobry, E Garnsey and Y-F Chong (2017) ‘The Impact on Energy Consumption of Daylight Saving Clock Changes’, Energy Policy 38(9): 247-60.

Kellogg, Ryan, and Hendrik Wolff (20008) ‘Daylight Time and Energy: Evidence from an Australian Experiment’, Journal of Environmental Economics and Management 56: 207-20.

Kotchen, Matthew, and Laura Grant (2011) ‘Does Daylight Saving Time Save Energy? Evidence from a Natural Experiment in Indiana’, Review of Economics and Statistics 93(4): 1172-85.

Mirza, Faisal, and Olvar Bergland (2001) ‘The Impact of Daylight Saving Time on Electricity Consumption: Evidence from Southern Norway and Sweden’, Energy Policy 39: 3558-71.

Stearns, Jonathan (2018) ‘Now Brussels Wants to Take Away Your Summer Time’, Bloomberg, 8 February.

Most read

Labour market effects of robots: evidence from Turkey

Evidence from developed countries on the impact of automation on labour markets suggests that there can be negative effects on manufacturing jobs, but also mechanisms for workers to move into the services sector. But this narrative may not apply in developing economies. This column reports new evidence from Turkey on the effects of robots on labour displacement and job reallocation.

Global value chains and domestic innovation: evidence from MENA firms

Global interlinkages play a significant role in enhancing innovation by firms in developing countries. In particular, as this column explains, participation in global value chains fosters a variety of innovation activities. Since some countries in the Middle East and North Africa display a downward trend on measures of global innovation, facilitating the GVC participation of firms in the region is a prospective channel for stimulating underperforming innovation.

Food insecurity in Tunisia during and after the Covid-19 pandemic

Labour market instability, rising unemployment rates and soaring food prices due to Covid-19 are among the reasons for severe food insecurity across the world. This grim picture is evident in Tunisia, where the government continues to provide financial and food aid to vulnerable households after the pandemic. But as this column explains, the inadequacy of some public policies is another important factors causing food insecurity.

Sustaining entrepreneurship: lessons from Iran

Does entrepreneurial activity naturally return to long-term average levels after big economic disturbances? This column presents new evidence from Iran on trends in entrepreneurship among various categories of firm size, sector and location – and suggests policies that could be effective in promoting entrepreneurial activities.

Intimate partner violence: the impact on women’s empowerment in Egypt

Although intimate partner violence is a well-documented and widely recognised problem, empirical research on its prevalence and impact is scarce in developing countries, including those in the Middle East and North Africa. This column reports evidence from a study of intra-household disparities in Egypt, taking account of attitudes toward gender roles, women’s ownership of assets, and the domestic violence that wives may experience from their husbands.

Manufacturing firms in Egypt: trade participation and outcomes for workers

International trade can play a large and positive role in boosting economic growth, reducing poverty and making progress towards gender equality. These effects result in part from the extent to which trade is associated with favourable labour market outcomes. This column presents evidence of the effects of Egyptian manufacturing firms’ participation in exporting and importing on their workers’ productivity and average wages, and on women’s employment share.

Do capital inflows cause industrialisation or de-industrialisation?

There is a clear appeal for emerging and developing economies, including those in MENA, to finance investment in manufacturing industry at home with capital inflows from overseas. But as the evidence reported in this column indicates, this is a potentially risky strategy: rather than promoting industrialisation, capital flows can actually lead to lower manufacturing value added and/or a reallocation of resources towards industries with lower technology intensity.

Financial constraints on small firms’ growth: pandemic lessons from Iran

How does access to finance affect the growth of small businesses? This column presents new evidence from Iran before and during the Covid-19 pandemic – and lessons learned by micro, small and medium-sized enterprises.

The economics of Israeli war aims and strategies

Israel’s response to last October’s Hamas attack has led to widespread death and destruction. This column outlines the impact thus far, including the effects on food scarcity, migration and the Palestinian economy in both Gaza and the West Bank.

Happiness in the Arab world: should we be concerned?

Several Arab countries have low rankings in the latest comparative assessment of average happiness across the world. But as this column explains, the average is not a reliable summary statistic when applied to ordinal data. The evidence from more robust analysis of socio-economic inequality in happiness suggests that policy-makers should be less concerned about happiness indicators than the core development objective of more equitable social conditions for citizens.