Extreme Weather Events, Black-Outs, and Household Adaptation

Jacqueline Adelowo

No 416, ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: Extreme weather events are becoming more frequent with climate change, yet cold stress events remain understudied. I use the 2021 Texas freeze to examine household adaptation to extreme weather-induced blackouts, focusing on (1) adaptation uptake, (2) socio-economic disparities in adaptive capacity, and (3) salience spillovers. Using an event study design, I analyze the timevarying effects of a one-off dosage treatment, defined as blackout exposure. I leverage novel data on installation permits for home generators and rooftop-solar-battery systems as adaptation measures. Results show a significant, robust response peaking in the second calendar quarter post-treatment, where a 10 percentage point increase in outages leads to 16.4 (8) additional quarterly permits per 10,000 households for generators (solar-battery systems). Google search data suggests the 2021 freeze was widely associated with climate change for the first time, possibly explaining the adaptation response absent in earlier events. Notably, in addition to finding weaker responses for lower-income, less educated, and high-minority neighborhoods, I also identify a one-quarter delay in their response, highlighting disparities in both adaptive capacity and promptness. Salience spillovers further reinforce adaptation, which can be explained both by social connectedness and geographic proximity. My findings underscore the need for public outage resiliency investments and regulation to decrease unequal future exposure and policies that address inequities in climate resilience.

Date: 2025
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