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Methodological Advances in Energy Modelling: 1970-1990

Both the theory and practice of energy modelling have made phenomenal advances over the last 20 years. After providing a brief description of the state of energy modelling circa 1970, this paper identifies four major methodological advances profoundly affecting energy modelling. In the area of energy demand modelling, the translog and other generalized functional forms have proven readily adaptable to questions of interfuel substitution and energy/non-energy substitution. Additionally, discrete choice models, particularly the multinomial logit models, have provided a conceptually appealing framework within which to model appliance choice. The third advance has come in both the frequency and sophistication of use of panel data sets, which offer a much richer set of price and income variation. Finally, in the area of energy supply modelling, dynamic optimization models coupled with greater reliance on engineering information has lead to steady improvements in this area.

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Energy Specializations: Energy Modeling – Energy Data, Modeling, and Policy Analysis; Energy Modeling – Integrated Assessment Modeling; Energy Modeling – Other

JEL Codes:
E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
Q43 - Energy and the Macroeconomy
C59 - Econometric Modeling: Other

Keywords: Energy modeling, Translog, Panel data, Game theory

DOI: 10.5547/ISSN0195-6574-EJ-Vol14-No1-5

Published in Volume 14, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.