Measuring externalities of energy efficiency investments using subjective well-being data: The case of LED streetlights

Abstract

Outdoor streetlights are among the highest recurring energy-related expenses faced by municipalities. As a cost-savings measure, many cities have recently made large investments in energy efficient light emitting diode (LED) streetlights. Most LED streetlights produce a different wavelength of light that is often brighter than that produced by existing lights, which has led to high-profile debates on their impacts to the environment, human health, crime, and transportation safety. However, there is a lack of credible empirical evidence on the direction and magnitude of LED streetlight externalities, including their impacts to subjective well-being. To address this knowledge gap, we investigate local externalities of investments in LED streetlights across the 100 largest US counties by population using subjective well-being data from the US CDC Behavioral Risk Factor Surveillance System over 2005–2010. Difference-in-differences results suggest that LED retrofits generate significant positive well-being impacts, varying by respondent demographic characteristics and the number of streetlights replaced. On average, installing LED streetlights generates an externality equivalent to a $477 (6.9%) increase in per capita monthly household income.