Study Overview
Air conditioning adoption has large implications globally for energy markets and the environment. Using unusually rich microdata we show that air conditioning adoption has accelerated, significantly exceeding predictions made just ten years ago (Davis & Gertler, 2015). We then incorporate data from additional sources to understand mechanisms.
Study Results
Neither income growth nor rising temperatures appear to be able to explain the increased air conditioning adoption. Instead, our results point to Mexico's low electricity prices as a key driver.