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Policy implications of considering pre-commitments in U.S. aggregate energy demand system

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  • Rowland, Christopher S.
  • Mjelde, James W.
  • Dharmasena, Senarath

Abstract

Linear approximations of the Generalized Almost Ideal Demand System and Almost Ideal Demand System for U.S. energy are compared to contrast the explicit inclusion and exclusion of pre-committed consumption levels. Results indicate that pre-commitment levels, the quantity of a good that is consumed in the short run with little regard for price, helps to better explain energy demand in the U.S. compared to the system that does not explicitly consider pre-commitments. Policy implications are if pre-commitments are a legitimate assumption, larger price changes are necessary to achieve a given policy objective than if there are no pre-commitments.

Suggested Citation

  • Rowland, Christopher S. & Mjelde, James W. & Dharmasena, Senarath, 2017. "Policy implications of considering pre-commitments in U.S. aggregate energy demand system," Energy Policy, Elsevier, vol. 102(C), pages 406-413.
  • Handle: RePEc:eee:enepol:v:102:y:2017:i:c:p:406-413
    DOI: 10.1016/j.enpol.2016.12.041
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    More about this item

    Keywords

    Pre-commitments; Energy demand; Generalized Almost Ideal Demand System model; Almost Ideal Demand System model;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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