NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Light and the Heat: Productivity Co-benefits of Energy-saving Technology

Achyuta Adhvaryu, Namrata Kala, Anant Nyshadham

NBER Working Paper No. 24314
Issued in February 2018
NBER Program(s):Development Economics, Environment and Energy Economics

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.

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Document Object Identifier (DOI): 10.3386/w24314

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