Simulated maximum likelihood estimation of demand systems with corner solutions and panel data application to industrial energy demand
AbstractThis paper proposes a convenient method for evaluating energy price elasticities, when firms may switch between energy regimes. The methodology involves estimation of an energy demand system that explicitly deals with the zero expenditures problem, while allowing for unobserved heterogeneity. We apply a Simulated Maximum Likelihood technique for estimating a simultaneous equation energy demand system in the French pulp and paper sector, over the period1983-1996. Endogenous regime transitions are accounted for when computing energy price elasticities. Our estimates are used to predict the outcome of an environmental policy aimed at reducing CO2 emissions in the paper and pulp industry.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Dalloz in its journal Revue d'économie politique.
Volume (Year): Volume 113 (2003)
Issue (Month): 6 ()
Contact details of provider:
Web page: http://www.cairn.info/revue-d-economie-politique.htm
simulated maximum likelihood; non-negativity constraints; energy demand estimation;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Diewert, Walter E & Wales, Terence J, 1987.
"Flexible Functional Forms and Global Curvature Conditions,"
Econometric Society, vol. 55(1), pages 43-68, January.
- W. Erwin Diewert & T.J. Wales, 1989. "Flexible Functional Forms and Global Curvature Conditions," NBER Technical Working Papers 0040, National Bureau of Economic Research, Inc.
- Alan D. Woodland, 1993. "A Micro-Econometric Analysis of the Industrial Demand for Energy in NSW," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 57-90.
- Vassilis A. Hajivassiliou, 1991. "Simulation Estimation Methods for Limited Dependent Variable Models," Cowles Foundation Discussion Papers 1007, Cowles Foundation for Research in Economics, Yale University.
- Lee, Lung-Fei & Pitt, Mark M, 1986. "Microeconometric Demand Systems with Binding Nonnegativity Constraints: The Dual Approach," Econometrica, Econometric Society, vol. 54(5), pages 1237-42, September.
- Wales, T. J. & Woodland, A. D., 1983. "Estimation of consumer demand systems with binding non-negativity constraints," Journal of Econometrics, Elsevier, vol. 21(3), pages 263-285, April.
- Neary, J.P & Roberts, K.W.S, 1978.
"The Theory of Household Behaviour under Rationing,"
The Warwick Economics Research Paper Series (TWERPS)
132, University of Warwick, Department of Economics.
- Hajivassiliou, V A, 1994.
"A Simulation Estimation Analysis of the External Debt Crises of Developing Countries,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 9(2), pages 109-31, April-Jun.
- Hajivassiliou, 1993. "A Simulation Estimation Analysis of the External Debt Crises of Developing Countries," Cowles Foundation Discussion Papers 1057, Cowles Foundation for Research in Economics, Yale University.
- Vassilis A. Hajivassiliou, 1993. "A Simulation Estimation Analysis of the External Debt Crises of Developing Countries," Working Papers _022, Yale University.
- Vassilis A. Hajivassiliou & Axel Borsch-Supan, 1990.
"Smooth Unbiased Multivariate Probability Simulators for Maximum Likelihood Estimation of Limited Dependent Variable Models,"
Cowles Foundation Discussion Papers
960, Cowles Foundation for Research in Economics, Yale University.
- Borsch-Supan, Axel & Hajivassiliou, Vassilis A., 1993. "Smooth unbiased multivariate probability simulators for maximum likelihood estimation of limited dependent variable models," Journal of Econometrics, Elsevier, vol. 58(3), pages 347-368, August.
- repec:pri:indrel:572 is not listed on IDEAS
- Van Soest, Arthur & Kooreman, Peter, 1990. "Coherency of the indirect translog demand system with binding nonnegativity constraints," Journal of Econometrics, Elsevier, vol. 44(3), pages 391-400, June.
- Fuss, Melvyn A., 1977. "The demand for energy in Canadian manufacturing : An example of the estimation of production structures with many inputs," Journal of Econometrics, Elsevier, vol. 5(1), pages 89-116, January.
- Thomas Bue Bjorner & Henrik Holm Jensen, 2002. "Interfuel Substitution within Industrial Companies: An Analysis Based on Panel Data at Company Level," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 27-50.
- Wales, T J & Woodland, A D, 1980. "Sample Selectivity and the Estimation of Labor Supply Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(2), pages 437-68, June.
- Keane, Michael P, 1994. "A Computationally Practical Simulation Estimator for Panel Data," Econometrica, Econometric Society, vol. 62(1), pages 95-116, January.
- Bousquet, Alain & Ivaldi, Marc, 1991.
"An Individual Choice Model of Energy Mix,"
IDEI Working Papers
4, Institut d'Économie Industrielle (IDEI), Toulouse.
- George Kouris, 1983. "Energy Demand Elasticities in Industrialized Countries: A Survey," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 73-94.
- Chihwa Kao & Lung-fei Lee & Mark M. Pitt, 2000.
"Simulated Maximum Likelihood Estimation of the Linear Expenditure System with Binding Non-Negativity Constraints,"
CEMA Working Papers
50, China Economics and Management Academy, Central University of Finance and Economics, revised Apr 2001.
- Chihwa Kao & Lung-fei Lee & Mark M. Pitt, 2001. "Simulated Maximum Likelihood Estimation of the Linear Expenditure System with Binding Non-Negativity Constraints," Annals of Economics and Finance, Society for AEF, vol. 2(1), pages 215-235, May.
- Mark M. Pitt & Daniel L. Millimet, 1999. "Estimation of Coherent Demand Systems with Many Binding Non-Negativity Constraints," Working Papers 99-4, Brown University, Department of Economics.
- BEL FranÃ§ois & LACROIX Anne & SALANIE FranÃ§ois & THOMAS Alban, 2006. "Evaluating the impact of CAP reforms on land use and the environment: a two-step estimation with multiple selection rules and panel data," LERNA Working Papers 06.13.206, LERNA, University of Toulouse.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jean-Baptiste de Vathaire).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.