Most Texans recall the severe winter storm in February 2021 that left millions without power and caused significant damage. While such large-scale disasters are often outside the control of utility providers, more routine power interruptions can also have a major impact on daily life and local economies.
Researchers at Texas Tech University have studied how these routine power outages affect regional economic growth and housing prices. The research was led by Bradley Ewing, professor, and Zachary Keeler, assistant professor of practice, both from the Jerry S. Rawls College of Business.
Keeler explained that their study is different from others because it separates outages lasting more than five minutes—known as Major Event Days (MEDs)—from shorter, more frequent outages not related to major events. “We’re one of the first studies that look at minor events, which we see in both studies are the things that seem to matter the most. Those outages that are relatively more avoidable,” he said.
The researchers found that counties with fewer and shorter outages often experience positive employment growth. Reliable power helps local businesses succeed and improves community outcomes. In contrast, minor interruptions may indicate problems with aging or overloaded infrastructure and can harm business operations and residents’ well-being.
In their analysis of housing prices, they discovered that regular operating interruptions lower home values in both metropolitan and non-metropolitan areas, as well as in regions with varying risks for natural disasters. High-risk counties experienced the largest declines in home values due to these interruptions.
The study found that if the average number of minutes customers lose power increases by one standard deviation, housing prices decrease by 0.25%. When applied to all U.S. homes at the end of 2022, this could mean a loss of over $113 billion in home value and more than $1 billion in property taxes each year.
Keeler emphasized the practical implications: “If we know how power reliability impacts housing prices, policymakers can consider that when making the decisions they need to make,” he said. “Home buyers can then factor in things like power reliability when figuring out how much they want to pay for a house or where they want to locate.”
To conduct their research, Ewing and Keeler used data from utilities across counties in the Lower 48 states between 2013 and 2020 for power reliability measures; they also examined changes in county-level employment and population growth from 2014 to 2019 as well as annual housing price data.
They relied on several technical indices measuring outage duration and frequency—including System Average Interruption Duration Index (SAIDI), System Average Interruption Frequency Index (SAIFI), and Customer Average Interruption Duration Index (CAIDI).
Keeler noted there are many factors influencing both power reliability and economic outcomes; their study used advanced statistical methods such as double machine learning (DML) to control for variables like labor force participation rates or broadband access. This approach helps prevent errors caused by overlapping variables or overfitting models.
The team also checked their findings using multiple methodologies across different types of counties—urban versus rural—and considered effects like migration patterns on awareness about local grid reliability.
Both studies highlight why reliable electricity matters for communities’ economic health but leave open questions about improving restoration times or preventing unnecessary outages. “I don’t necessarily have those answers,” Keeler said, “but we show that that might be an important consideration if you want your region to grow or if you want local housing prices to increase because we see that there’s this linkage there.”
Their future work will continue exploring connections between grid reliability, state-level gross domestic product, income inequality, and other societal outcomes.
“I think, as scholars, we should try to bridge that gap as best as possible,” Keeler added. “We want our research to have an impact.”
