Lucas Davis and Paul Gertler “Why Did Air Conditioning Adoption Accelerate Faster Than Predicted? Evidence from Mexico” (June 2025) | WP-353 | Blog Post
Abstract:
It has become common in climate change studies to make predictions many decades into the future, but researchers have only rarely returned later to check the accuracy of these predictions. In this paper, we perform such an exercise. In our own previous research, we used household-level microdata from Mexico to predict future air conditioning adoption (Davis and Gertler, 2015). Revisiting these predictions with 10+ years of additional data, we find that air conditioning in Mexico has accelerated, significantly exceeding our predictions. As we discuss, this growth has large implications for health and mortality, electricity demand, grid reliability, and the environment. We then incorporate data from additional sources to try to understand the mechanisms. Neither income growth, nor rising temperatures, nor migration patterns, nor an overly restrictive model can explain the prediction gap. Instead, our results point to low electricity prices and technological change in air conditioners as key drivers.