The Light and the Heat: Productivity Co-Benefits of Energy-Saving Technology

64 Pages Posted: 18 Jun 2018 Last revised: 9 Jun 2021

See all articles by Achyuta Adhvaryu

Achyuta Adhvaryu

University of Michigan at Ann Arbor

Namrata Kala

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA)

Anant Nyshadham

Boston College - Department of Economics

Date Written: February 2018

Abstract

Measurement of the full costs and benefits of energy-saving technologies is often difficult, confounding adoption decisions. We study consequences of the adoption of energy-efficient LED lighting in garment factories around Bangalore, India. We combine daily production line-level data with weather data and estimate a negative, nonlinear productivity-temperature gradient. We find that LED lighting, which emits less heat than conventional bulbs, decreases the temperature on factory floors, and thus raises productivity, particularly on hot days. Using the firm’s costing data, we estimate the pay-back period for LED adoption is nearly one-sixth the length after accounting for productivity co-benefits.

Suggested Citation

Adhvaryu, Achyuta and Kala, Namrata and Nyshadham, Anant, The Light and the Heat: Productivity Co-Benefits of Energy-Saving Technology (February 2018). NBER Working Paper No. w24314, Available at SSRN: https://ssrn.com/abstract=3193275

Achyuta Adhvaryu (Contact Author)

University of Michigan at Ann Arbor ( email )

500 S. State Street
Ann Arbor, MI 48109
United States

Namrata Kala

Massachusetts Institute of Technology (MIT) - Economics, Finance, Accounting (EFA) ( email )

77 Massachusetts Avenue
Cambridge, MA 02139-4307
United States

Anant Nyshadham

Boston College - Department of Economics ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States

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