Earlier this week, Scioto Analysis released our most recent demonstration cost-benefit analysis, this time looking at the impact daylight saving time has on Ohio. Overall, we found that the downsides associated with switching between daylight and standard time leads to about $40 million in social costs for Ohio every year.
Essentially, we found that switching our clocks twice a year isn’t really worth the hassle it creates.
However, if policymakers want to make a change, they will need to decide which time to adopt. If they choose permanent standard time, that means Ohio would have lighter mornings and the sun would set earlier. Permanent daylight time of course means darker mornings and later sunsets (currently, states are barred from adopting permanent daylight time at the federal level, so this policy would require a federal change first).
The decision between permanent standard time and permanent daylight saving time is particularly interesting because although our research shows that these two are roughly equivalent from a social benefit standpoint, there are important practical implications of each.
The main tradeoff we found was between energy consumption and crime. Permanent standard time reduces overall energy consumption, but the earlier sunsets mean we expect to see increases in crime rates. Conversely, permanent daylight time should reduce crime as a result of the later sunset, but at the cost of increased energy use.
The monetized value of these effects are basically equal (the benefit of reducing crime is just slightly larger), meaning from an economic perspective it largely doesn’t matter which choice policymakers go with. Either way Ohioans will get roughly the same value. To fully understand these two policy options, we need to understand how we monetize these benefits. How are we able to say that a reduction in crime is equal to a reduction in energy use?
The big question with monetization is the following: how much are people willing to pay for something? Consider the crime example. Some people are very risk-averse and would be willing to pay a lot to reduce their risk of experiencing crime. Those who are comfortable with more risk would likely find better uses for their resources elsewhere. But ultimately, everyone has a point at which they would stop paying to reduce their risk of crime.
We see this in security markets. Some people pay more than others for security systems on homes, showing that there are differences in willingness to pay for reductions in risk of crime victimization.
The important point is that our monetized values try to capture the opinions of everyone in a society, and individuals may disagree with these values.
This means that although from a social perspective permanent standard time and permanent daylight saving time are basically the same, individual policymakers may see one benefit as outweighing the other. The preferred option will be the one that most aligns with the views of the people deciding on the policy.
Either way, Ohio would benefit economically from doing away with the time change every year. The increase in car crashes and decrease in productivity that results from messing with peoples’ sleep schedules twice a year isn’t worth it.
As election season approaches, this is an excellent reminder that the people we choose to represent us have a lot of influence over the way our society functions. Even in years where there aren’t any federal or state offices to vote for, local elected officials can have a big impact. City councils, mayors, and school districts all have major sway over local policy. Make sure to inform yourself about the candidates in your area, and go vote on election day.