An Experiment in Environmental Economics: Understanding Energy Efficiency and Electricity Reliability

Wednesday, February 08, 2017
4:30 PM to 5:30 PM
2260 Hayward St, Ann Arbor, MI 48109
An Experiment in Environmental Economics: Understanding Energy Efficiency and Electricity Reliability
Robyn Meeks, PhD

Assistant Professor of Environmental Economics, School of Natural Resources & Environment, University of Michigan, Ann Arbor, MI

Wednesday, February 8, 2017, 4:30 PM

Room 1670 Beyster Building (North Campus), University of Michigan
Refreshments served before the seminar (please bring your own coffee or tea mug)
Abstract. Randomized experiments have become increasingly important way to test the impacts of environmental technologies when they interact with human behavior. This presentation will share one such experiment.  Our experiment is motivated by the fact that overloaded electrical systems are a major source of unreliable power (outages) in developing countries. Using a randomized saturation design, we estimate the impact of energy efficient lightbulbs on household electricity consumption and local electricity reliability in the Kyrgyz Republic. Receiving compact fluorescent lamps (CFLs) significantly reduced household  electricity consumption. Estimates not controlling for spillovers in take-up underestimate the impacts of the CFLs, as control households near the treated are likely to take-up CFLs themselves. Greater saturation of CFLs within a transformer leads to aggregate reliability impacts of two fewer days per month without electricity due to unplanned outages relative to pure controls. Increased electricity reliability permits households to consume more electricity services, suggesting that CFL treatment results in  technological externalities. The spillovers in take-up and technological externalities may provide an additional explanation for the gap between empirical and engineering estimates of the impacts of energy efficient technologies.