Abstract
Quarterly data for Israel are used to compare and contrast three dynamic econometric methodologies for estimating the demand for electricity by households and industrial companies. These are the Dynamic Regression Model and two approaches to cointegration (OLS and Maximum Likelihood). Since we find evidence of seasonal unit roots in the data we also test for seasonal cointegration. We find that the scale elasticities are similar in all three approaches but the OLS price elasticities are considerably lower. Moreover, OLS suggests non-cointegration. The paper concludes by stochastically simulating the DRMs to calculate upside-risk in electricity demand.
Original language | English |
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Pages (from-to) | 168-183 |
Number of pages | 16 |
Journal | Energy Economics |
Volume | 21 |
Issue number | 2 |
DOIs | |
State | Published - 1 Apr 1999 |
Keywords
- Electricity consumption
- Israel
- Seasonal cointegration
- Upside-risk