Does Daylight Savings Time Save Energy? Evidence from Ontario

Abstract

Daylight Savings Time was adopted for the purposes of reducing energy consumption, but recent studies have cast some doubt on whether it still serves this purpose effectively. This study estimates the effect of Daylight Savings Time on electricity demand in Ontario, Canada. It uses a quasi-experimental approach, by leveraging the fact that the transition to DST occurs on a different day in each year. The results suggest that Daylight Savings Time reduces the demand for electricity by about 1.5 percent in Ontario. The reductions in electricity consumption is concentrated during the evening period. The reduction in electricity demand appears to persist for at least several weeks following the transition to Daylight Savings Time.

Keywords: Daylight savings time, energy demand, natural experiment

JEL Classification: Q41, C22