Residential Energy Demand: a Multiple Discrete-Continuous Extreme Value Model using Italian Expenditure Data
The economic analysis of energy consumption is mostly focused on single components of total expenditure in energy-consuming services. The discrete-continuous models, following the formulation of Hanemann (1984), consider the case of perfect substitute goods: the maximization process leads to extreme corner solutions in which only one alternative is selected. According to this model the literature on energy consumption is limited to study some components of total energy consumption, i.e. space and water heating or transportation. Following the path opened by Pinjari and Bhat (2010), the goal of this paper is to build a multiple discrete-continuous model of residential energy demand based on Italian expenditure data. A non-linear utility structure, originally used in Kim et al. (2002) and extended in Bhat (2005), is implemented within the Kuhn-Tucker multiple-discrete economic model of consumer demand proposed by Wales and Woodland (1983). The paper here presented is the first application of this model to Italian expenditure data. The model predict parameters stability over time and low price elasticities for electricity (0.56) and natural gas (1.17). Considerble variations in natural gas expenditures (+54%) are predicted in case of climate changes measured of increases in Heating Degree Days (+15%).
|Date of creation:||Feb 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +39 011670 4406
Fax: +39 011670 3895
Web page: http://www.unito.it/
More information through EDIRC
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.:
- Nevo, Aviv, 1998.
"Measuring Market Power in the Ready-To-Eat Cereal Industry,"
Food Marketing Policy Center Research Reports
037, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
- Nevo, Aviv, 2001. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Econometrica, Econometric Society, vol. 69(2), pages 307-42, March.
- Aviv Nevo, 1998. "Measuring Market Power in the Ready-to-Eat Cereal Industry," NBER Working Papers 6387, National Bureau of Economic Research, Inc.
- Nevo, Aviv, 1998. "Measuring Market Power in the Ready-To-Eat Cereal Industry," Research Reports 25164, University of Connecticut, Food Marketing Policy Center.
- Nevo, Aviv, 1999. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Competition Policy Center, Working Paper Series qt7cm5p858, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Aviv Nevo, 2003. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Microeconomics 0303006, EconWPA.
- Bhat, Chandra R., 2005. "A multiple discrete-continuous extreme value model: formulation and application to discretionary time-use decisions," Transportation Research Part B: Methodological, Elsevier, vol. 39(8), pages 679-707, September.
- Nesbakken, Runa, 2001. " Energy Consumption for Space Heating: A Discrete-Continuous Approach," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(1), pages 165-84, March.
- Hanemann, W Michael, 1984. "Discrete-Continuous Models of Consumer Demand," Econometrica, Econometric Society, vol. 52(3), pages 541-61, May.
- Larsen, Bodil Merethe & Nesbakken, Runa, 2004. "Household electricity end-use consumption: results from econometric and engineering models," Energy Economics, Elsevier, vol. 26(2), pages 179-200, March.
- Jerry A. Hausman, 1979. "Individual Discount Rates and the Purchase and Utilization of Energy-Using Durables," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 33-54, Spring.
- Roberto Roson & Enrica de Cian & Elisa Lanzi, 2007.
"The Impact of Temperature Change on Energy Demand a Dynamic Panel Analysis,"
2007_06, Department of Economics, University of Venice "Ca' Foscari".
- Enrica De Cian & Elisa Lanzi & Roberto Roson, 2007. "The Impact of Temperature Change on Energy Demand: A Dynamic Panel Analysis," Working Papers 2007.46, Fondazione Eni Enrico Mattei.
- Vaage, Kjell, 2000.
"Heating technology and energy use: a discrete/continuous choice approach to Norwegian household energy demand,"
Elsevier, vol. 22(6), pages 649-666, December.
- Vaage, K., 2000. "heating Technology and Energy Use: a Discrete/Continuous Choice Approach to Norwegian Household Energy Demand," Norway; Department of Economics, University of Bergen 214, Department of Economics, University of Bergen.
- Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
- 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.
- Andrea Bigano & Francesco Bosello & Giuseppe Marano, 2006. "Energy Demand and Temperature: A Dynamic Panel Analysis," Working Papers 2006.112, Fondazione Eni Enrico Mattei.
- Halvorsen, Bente & Larsen, Bodil M., 2001. "The flexibility of household electricity demand over time," Resource and Energy Economics, Elsevier, vol. 23(1), pages 1-18, January.
- Dubin, Jeffrey A & McFadden, Daniel L, 1984. "An Econometric Analysis of Residential Electric Appliance Holdings and Consumption," Econometrica, Econometric Society, vol. 52(2), pages 345-62, March.
When requesting a correction, please mention this item's handle: RePEc:uto:dipeco:201203. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Piero Cavaleri)or (Marina Grazioli)
If references are entirely missing, you can add them using this form.