How effective is energy-efficient housing? Evidence from a field trial in Mexico

Despite growing enthusiasm, there is still much to be learned about how well energy-efficiency investments work in practice. Evidence is particularly lacking from low- and middle-income countries, despite a widespread view that these countries have many of the best opportunities. This paper evaluates a field trial in Mexico in which a quasi-experimental sample of new homes was provided with insulation and other energy-efficient upgrades. A novel feature of our study is that we deploy large numbers of data loggers which allow us to measure temperature and humidity at high frequency inside homes. We find that the upgrades had no detectable impact on electricity use or thermal comfort, with essentially identical temperature and humidity levels in upgraded and non-upgraded homes. These results stand in sharp contrast to the engineering estimates that predicted considerable improvements in thermal comfort and up to a 26% decrease in electricity use. As we document, part of the explanation is that most households have their windows open on hot days, nullifying the thermal benefits of roof and wall insulation. Overall, we conclude that the benefits from these investments are unlikely to exceed the costs, which added $650-$850 USD to the cost of each home. Our results underscore the urgent need to fully incorporate human behavior into engineering models of energy use.