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Using the Life Satisfaction Approach to Value Daylight Savings Time Transitions: Evidence from Britain and Germany

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Abstract

Daylight savings time represents a public good with costs and benefits. We provide the first comprehensive examination of the welfare effects of the spring and autumn transitions for the UK and Germany. Using individual-level data and a regression discontinuity design, we estimate the effect of the transitions on life satisfaction. Our results show that individuals in both the UK and Germany experience deteriorations in life satisfaction in the first week after the spring transition. We find no effect of the autumn transition. We attribute the negative effect of the spring transition to the reduction in the time endowment and the process of adjusting to the disruption in circadian rhythms. The effects are particularly strong for individuals with young children in the household. We conclude that the higher the shadow price of time, the more difficult is adjustment. Presumably, an increase in flexibility to reallocate time could reduce the welfare loss for individuals with binding time constraints.

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Notes

  1. The study defines sleep efficiency as the ratio of actual sleeping time to total time in bed.

  2. For a recent review using neuroimaging to describe brain functioning during sleep (see Dang-Vu et al. 2007).

  3. We refer to individuals’ short-term time constraint when speaking of a “change in the time endowment”. In the long-term, we do, of course, not observe a change but a reallocation of the time endowment, as 1 h is transferred from spring to fall. We thank an anonymous referee for pointing this out.

  4. Formally, the Lagrangian multiplier on the time constraint in a utility maximisation problem represents the shadow price of time (for a formal exposition, see Hamermesh and Lee 2007). More intuitively, the shadow price of time equals the marginal utility of relaxing the time constraint. Practically, we can draw conclusions about the shadow price of time from an empirical well-being function by calculating the marginal effect of time.

  5. Some literatures also shows that individuals in employment and/or with children have higher sleep deficits. For both mothers and fathers, Gay et al. (2004) document the increased fatigue and sleep loss after child birth. For workers, Roenneberg et al. (2004) show that working people on average accumulate a sleep deficit during the week, and catch up on lost sleep during on weekends.

  6. In the BHPS, individuals are asked to assess their “current situation”; the original German language version of the questionnaire asks for life satisfaction at the moment (“gegenwärtig”).

  7. Due to changes in the fieldwork of the SOEP, we have excluded the period from 2005 onwards from our main analysis. Since 2005, the start of the fieldwork is February, which is 1 month later than before 2005. In 2008, incentives to participate in the survey were changed (Sozialforschung 2012). Because we observe a peak in the density of interviews at the end of March for the years 2005–2012 compared to previous years that we cannot explain, we present results for the time period 2005–2012 separately in Table A.8.

  8. In the SOEP, out of 31,389 observations within our 2 week window around the transition date, we drop 1736 observations with missing values for household income and years of education. For the spring transition in the BHPS, out of a total of 9374 observations for our main 2  week window, we are forced to drop 424 observations with missing control variables. For the autumn transition in the BHPS, we drop 2644 observations out of of 39,588 observations due to missing control variables.

  9. For a detailed documentation of generated variables in the SOEP, such as years of education (see, SOEP Group 2013).

  10. Tables A.1 to A.3 present the summary statistics for the stricter 1 week window. On average, the differences are smaller for the 1 week window compared to the 2 week window, as expected. Furthermore, the statistics show very similar qualitative patterns.

  11. We also reject the null hypothesis of an F-test for joint significance of the mid-week parameters (Tuesday–Wednesday) in both Germany (\(p=0.013\)) and the UK (\(p=0.063\)).

  12. Specifically, the CIV for the first week after the transition to DST can be calculated from the total differential of the life satisfaction model in Eq. 3 as \(\Delta \ln { hhincome } = -\frac{{\upalpha }_1}{{\upbeta }} \Delta DST1w\). Hence, we need an increase in income by \(\left[ \exp \left( -\frac{{\upalpha }_1}{{\upbeta }} \right) - 1 \right] \cdot 100\,\%\) in order to hold life satisfaction constant in the first week after DST. For an equivalent derivation and more detailed discussion of a compensating surplus (see Frey et al. 2009).

  13. We are not the first study to find that the marginal utility of income is higher in Germany than in the UK (see e.g., Layard et al. 2008; Myrskylä and Margolis 2014). The differences we find between the UK and Germany are hence not particular to our specification.

  14. Calculated as \((\exp (0.069/0.635)-1)\cdot 100\,\%\) and \((\exp (0.077/0.183)-1)\cdot 100\,\%\), respectively. The results for the CIV are qualitatively identical when we use a model without any additional control variables.

  15. Full estimation results for the six groups are presented in the Appendix in Table A.4.

  16. We collected information about school holidays from http://www.schulferien.org/Schulferien_nach_Jahren/2010/schulferien_2010.html.

  17. The control variables of course do not include a measure of health.

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Acknowledgments

We are grateful for helpful comments and suggestions received from two anonymous reviewers, Regina T. Riphahn, Guyonne Kalb, and Michael Oberfichtner.

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  1. School of Business and Economics, University of Erlangen-Nuremberg, Lange Gasse 20, 90403, Nuremberg, Germany

    Daniel Kuehnle

  2. Department of Economics, University of Halle-Wittenberg, Halle, Germany

    Christoph Wunder

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Kuehnle, D., Wunder, C. Using the Life Satisfaction Approach to Value Daylight Savings Time Transitions: Evidence from Britain and Germany. J Happiness Stud 17, 2293–2323 (2016). https://doi.org/10.1007/s10902-015-9695-8

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