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Residential Electricity Demand: A Suggested Appliance Stock Equation

Abstract:
A large amount of work in residential electricity demand has relied on logit estimation of a disaggregated appliance stock. (See the seminal work by McFadden et al., 1977.) While this approach may be suitable for certain types of models with certain goals in mind, a simple formulation of an appliance stock equation may sometimes be appropriate. For example, if the goal is to estimate seasonal patterns in elasticities employing a national micro-data set (as in the National Interim Energy Consumption Survey 1978-1979; see U.S. Department of Energy, 1980), then it may be appropriate to develop an appliance stock equation to predict the size of an appliance stock index (approximating a continuous variable). The present appliance stock equation is part of a three-equation model that is estimated in log-linear form via 2SLS.

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Energy Specializations: Energy Modeling – Sectoral Energy Demand & Technology; Energy Efficiency; Electricity – Markets and Prices

JEL Codes:
Q55 - Environmental Economics: Technological Innovation
D42 - Market Structure, Pricing, and Design: Monopoly

Keywords: Residential electricity demand, Appliances, Logit, Log-linear, Elasticities

DOI: 10.5547/ISSN0195-6574-EJ-Vol5-No2-11


Published in Volume 5, Number 2 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.