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The transaction cost of summer time
March remains, until further notice, the month in which many countries put the clock forward until autumn, but opinions about the practice are divided. Can behavioural economics shed some (day)light?
The younger folk among us may not be old enough to remember it, but we actually have been here before — I mean, having to pay through the nose for oil (and for energy in general). The commotion on the global oil markets in 1973, with soaring prices following production cutbacks by Arab oil exporting nations triggered many countries to look for policies to conserve energy, from banning driving on Sundays to — you guessed it — daylight saving time (DST), to make better use of natural light. As energy prices fell and stabilized again, the need for such interventions declined, but DST remained. Over the last decade or so, the practice has become the subject of growing criticism, to the point that many countries and territories have been strongly considering dropping it. But is that well founded?
Even if it’s free, there is often a cost
Intriguingly, economics, and indeed behavioural economics, can help us explore the question. Consider the following situation: you have been wearing…
