Having the entire state switch to daylight-saving time each year, rather than stay on standard time, costs Indiana households an additional $8.6 million in electricity bills. They conclude that the reduced cost of lighting in afternoons during daylight-saving time is more than offset by the higher air-conditioning costs on hot afternoons and increased heating costs on cool mornings.
"I've never had a paper with such a clear and unambiguous finding as this," says Mr. Kotchen, who presented the paper at a National Bureau of Economic Research conference this month.
A 2007 study by economists Hendrik Wolff and Ryan Kellogg of the temporary extension of daylight-saving in two Australian territories for the 2000 Summer Olympics also suggested the clock change increases energy use.