Demand Systems for Energy Forecasting: Practical Considerations for Estimating a Generalized Logit Model
نویسندگان
چکیده
Generalized Logit models of demand systems for energy and other factors have been shown to work well in comparison with other popular models, such as the Almost Ideal Demand System and the TransLog model. The main reason is that the derived price elasticities are robust when expenditure shares are small, as they are for electricity and fuels. A number of different versions of the Generalized Logit model have been applied in the literature, and the primary objective of the paper is to determine which one is the best. Using annual data for energy demand in the USA at the state level, the final model selected is similar to a simple form that was originally proposed by Considine. A second objective of the paper is to demonstrate that the estimated elasticities are sensitive to the units specified for prices, and to show how price scales should be estimated as part of the model. The authors wish to thank the New York Department of Public Service, the Cornell Institute for Social and Economic Research (CISER), and the College of Agricultural and Life Sciences for supporting this research. The responsibility for all conclusions rests exclusively with the authors, and the conclusions do not necessarily reflect the view of the sponsors. The authors are, of course, solely responsible for all errors. • Ph.D. Student in Agricultural, Resource, and Managerial Economics. •• Professor of Agricultural, Resource, and Managerial Economics, and Director of Cornell Institute for Social and Economic Research, Cornell University, Ithaca, NY 14853-7801. Demand Systems for Energy Forecasting: Practical Considerations for Estimating a Generalized Logit Model Weifeng Weng and Tim Mount
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تاریخ انتشار 2009