Can Digitalization Improve Public Services? Evidence from Innovation in Energy Management

Abstract

This paper examines how digitalization impacts public service provision through a study of the U.S. power sector. We exploit the staggered timing of electric utilities’ investments in smart meters and find that electricity losses per unit sold decrease by 3.6%. This efficiency improvement is driven by a 5.9% reduction in total losses and 1.2% increase in sales. Additional results suggest this occurs through improvements in energy management. The effects are driven by government-owned utilities as opposed to privately-owned. Through a supplementary analysis of within-utility electricity reliability in Texas, we also find that digitalization decreased power outage duration but not frequency.

Zhenxuan Wang

Assistant Professor

My research interests lie at the intersection of environmental and energy economics, climate policy, development economics, and public economics.