Here in the UK, the long, dark nights are drawing in and it takes a lot longer for the sun to rise in the morning. For those of us who like to run before work, this is incredibly annoying.
The UK is one of the 70 countries that implement Daylight Savings Time (DST), along with the likes of New Zealand, Paraguay, all 27 EU countries and most places in the USA.
On Sunday morning, we’ll be switching from British Summer Time (BST) to Greenwich Mean Time (GMT), effectively gaining an hour of sleep. Plus, it means it’ll be lighter for longer in the mornings.
Growing up, I was always told this had something to do with the farmers, but apparently, this is a myth. It’s actually because of an act passed in the British parliament during World War One, as a way to conserve energy by taking advantage of increased daylight.
So Daylight Savings Time is great for me, but it seems it might not be as great for the economy, according to new research by Durham University Business School.
Daylight Savings Time weakens the pound
When a country begins its Daylight-Saving Time, the value of its currency depreciates, reducing its strength in international markets, according to a new study conducted by Dr Michael Nower, Assistant Professor in Economics at Durham University Business School.
The study examined the impact of DST on bilateral exchange rates, using Federal Reserve daily data on exchange rates from 1971 to 2020. This amounted to over 300,000 observations, focused on a range of countries that observe DST: Australia, Canada, Denmark, the Eurozone, New Zealand, Norway, Sweden, Switzerland, the United Kingdom and the United States, as well as two countries that do not: Japan and South Africa.
The research found that DST had a significant impact on countries that observe it – with their currency depreciating from the week that DST begins, until the week that it ends.
Interestingly, the US dollar was the only currency which saw a minimal negative impact on its value when it entered DST. This, Dr Nower says, is likely due to the US market and the dollar being predominant across the globe, and many countries having to adjust their markets to correlate with the US market time zones.
“Over 1.2 billion people live in the countries where daylight saving time is currently fully or partially observed at different times of the year,” says Dr Nower. “Our research shows that, though it is argued that it has certain societal benefits, daylight savings time has a negative impact economically for the countries that observe it – weakening their currency over the period”.
Why does this happen?
Dr Nower used data on the equity markets of each country and on time zone differences to examine the drivers of the DST effect, showing evidence of the normal psychological and physiological effects of DST transition, as well as an impact of shifting time zones, relative to the USA.
He found the phenomenon is likely to be caused by a combination of two things. Firstly, the psychological impacts linked to DST, such as sleep disruption and heightened stress, which disrupt markets.
Secondly, the change in market position caused by shifting time zones. When countries enter into DST, their time difference with the United States – the world’s most prominent stock market – becomes larger, negatively affecting trading.
On a more positive note, the research also found that when the country exits Daylight Saving Time (DST) this depreciation is reversed.
This may be because when DST ends, time zones revert back to normality in relation to the US market, and there are positive psychological effects due to the changes in time.
What are the health impacts of DST?
Dr Nower’s research hinted at the disruptions to sleep and the psychological elements of DST, but changing the clocks can have a much deeper negative impact on your health. “That one-hour change may not seem like much, but it can wreak havoc on people’s mental and physical well-being in the short term,” says Dr. Charles Czeisler, professor of sleep medicine at Harvard Medical School’s Division of Sleep Medicine in an article for Harvard Health.
Interestingly, springing ahead one hour tends to be more disruptive than ‘falling back’ an hour, the article reveals. The hour change can upset our circadian rhythms, the body’s natural 24-hour cycles regulating key functions like appetite, mood, and sleep. People often find they have trouble adjusting their sleep schedule.
Because of this impact on sleep, DST may also exacerbate existing problems like depression, anxiety, and seasonal affective disorder.
Additionally, a research paper published in the American Academy of Sleep Medicine acknowledges that daylight saving time is less aligned with human circadian biology. “Due to the impacts of the delayed natural light/dark cycle on human activity, [this] could result in circadian misalignment, which has been associated in some studies with increased cardiovascular disease risk, metabolic syndrome and other health risks,” the research discovered.
Will we stop changing the clocks?
Clearly there are a lot of negative effects of changing the clocks twice a year. So why don’t we just stop doing it?
That’s what many academics and professionals are arguing. The American Academy of Sleep Medicine research, for example, suggests that a change to permanent standard time would be best aligned with human circadian biology and even has the potential to produce positive effects on public health and safety.
And as Dr Nower highlights, we may see fewer countries adopting daylight standard time in the near future. In fact, this has already started, with over 70 countries which previously used to observe DST abandoning it.
With discussions already ongoing – including a vote in the European Parliament to end DST across the EU – it seems this change may come quicker than expected.
By, Chloë Lane
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