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Powering Work from Home

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  • Steve Cicala

Abstract

This paper documents an increase in residential electricity consumption while industrial and commercial consumption has fallen during the COVID-19 pandemic in the United States. Hourly smart meter data from Texas reveals how daily routines changed during the pandemic, with usage during weekdays closely resembling those of weekends. The 16% residential increase during work hours offsets the declines from commercial and industrial customers. Using monthly data from electric utilities nationwide, I find a 10% increase in residential consumption, and a 12% and 14% reduction in commercial and industrial usage, respectively, during the second quarter of 2020. This contrasts with the financial crisis of 2008, which also witnessed a rapid decline in industrial electricity consumption, but left residential usage unaffected. The increase in residential consumption is found to be positively associated with the share of the labor force that may work from home. From April through July of 2020, total excess expenditure on residential electricity was nearly $6B.

Suggested Citation

  • Steve Cicala, 2020. "Powering Work from Home," NBER Working Papers 27937, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27937
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    1. Scott R Baker & Robert A Farrokhnia & Steffen Meyer & Michaela Pagel & Constantine Yannelis & Jeffrey Pontiff, 0. "How Does Household Spending Respond to an Epidemic? Consumption during the 2020 COVID-19 Pandemic," The Review of Asset Pricing Studies, Society for Financial Studies, vol. 10(4), pages 834-862.
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    4. Brodeur, Abel & Cook, Nikolai & Wright, Taylor, 2021. "On the effects of COVID-19 safer-at-home policies on social distancing, car crashes and pollution," Journal of Environmental Economics and Management, Elsevier, vol. 106(C).
    5. Steve Cicala & Stephen P. Holland & Erin T. Mansur & Nicholas Z. Muller & Andrew J. Yates, 2020. "Expected Health Effects of Reduced Air Pollution from COVID-19 Social Distancing," NBER Working Papers 27135, National Bureau of Economic Research, Inc.
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    7. Jose Maria Barrero & Nick Bloom & Steven J. Davis, 2020. "60 Million Fewer Commuting Hours Per Day: How Americans Use Time Saved by Working from Home," Working Papers 2020-132, Becker Friedman Institute for Research In Economics.
    8. Alexander W. Bartik & Zoe B. Cullen & Edward L. Glaeser & Michael Luca & Christopher T. Stanton, 2020. "What Jobs are Being Done at Home During the Covid-19 Crisis? Evidence from Firm-Level Surveys," NBER Working Papers 27422, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Cicala, Steve, 2021. "The incidence of extreme economic stress: Evidence from utility disconnections," Journal of Public Economics, Elsevier, vol. 200(C).
    2. Jose Maria Barrero & Nicholas Bloom & Steven J. Davis, 2020. "Why Working From Home Will Stick," Working Papers 2020-174, Becker Friedman Institute for Research In Economics.
    3. Maria Barrero, Jose & Bloom, Nicholas & Davis, Steven J., 2021. "Internet access and its implications for productivity, inequality and resilience," LSE Research Online Documents on Economics 113869, London School of Economics and Political Science, LSE Library.
    4. Olympia Bover & Natalia Fabra & Sandra García-Uribe & Aitor Lacuesta & Roberto Ramos, 2023. "Firms and Households during the Pandemic: What Do We Learn from Their Electricity Consumption?," The Energy Journal, , vol. 44(3), pages 267-288, May.
    5. Philipp Hauser & David Schönheit & Hendrik Scharf & Carl-Philipp Anke & Dominik Möst, 2021. "Covid-19’s Impact on European Power Sectors: An Econometric Analysis," Energies, MDPI, vol. 14(6), pages 1-17, March.
    6. Seferlis, Panos & Varbanov, Petar Sabev & Papadopoulos, Athanasios I. & Chin, Hon Huin & Klemeš, Jiří Jaromír, 2021. "Sustainable design, integration, and operation for energy high-performance process systems," Energy, Elsevier, vol. 224(C).
    7. Marion Bachelet & Matthias Kalkuhl & Nicolas Koch, 2022. "What if working from home will stick? Distributional and climate impacts for Germany," CEPA Discussion Papers 41, Center for Economic Policy Analysis.
    8. Daniel J. Lewis & Karel Mertens & James H. Stock & Mihir Trivedi, 2022. "Measuring real activity using a weekly economic index," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 37(4), pages 667-687, June.
    9. Fabra, Natalia & Lacuesta, Aitor & Souza, Mateus, 2022. "The implicit cost of carbon abatement during the COVID-19 pandemic," European Economic Review, Elsevier, vol. 147(C).
    10. Bachelet, Marion & Kalkuhl, Matthias & Koch, Nicolas, 2021. "What If Working from Home Will Stick? Distributional and Climate Impacts for Germany," IZA Discussion Papers 14642, Institute of Labor Economics (IZA).
    11. Aleksandra Matuszewska-Janica & Dorota Żebrowska-Suchodolska & Mariola E. Zalewska & Urszula Ala-Karvia & Marta Hozer-Koćmiel, 2023. "Differences in the Structure of Household Electricity Prices in EU Countries," Energies, MDPI, vol. 16(18), pages 1-23, September.

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    More about this item

    JEL classification:

    • G5 - Financial Economics - - Household Finance
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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