Combining Top-Down and Bottom-Up Approaches To Energy-Economy Modeling Using Discrete Choice Methods

Nicholas Rivers and Mark Jaccard

The Energy Journal, 2005, vol. 26, issue 1, 83-106

Abstract: Recently, hybrid models of the energy-economy have been developed with the objective of combining the strengths of the traditional top-down and bottom-up approaches by simulating consumer and firm behavior at the technological level. We explore here the application of discrete choice research and modeling to the empirical estimation of key behavioral parameters representing technology choice in hybrid models. We estimate a discrete choice model of the industrial steam generation technology decision from a survey of 259 industrial firms in Canada. The results provide behavioral parameters for the CIMS energy-economy model. We then conduct a policy analysis and show the relative effects of an information program, technology subsidy, and carbon dioxide tax on the uptake of alternative industrial steam generation technologies, including boilers and cogeneration systems. We also show how empirically derived estimates of parameter uncertainty can be propagated through the model to provide uncertainty estimates for major model outputs.

Keywords: Energy-economy model; Top-down; Bottom-up; CIMS model; Canada; policy analysis (search for similar items in EconPapers)
Date: 2005
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Journal Article: Combining Top-Down and Bottom-Up Approaches to Energy-Economy Modeling Using Discrete Choice Methods (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:26:y:2005:i:1:p:83-106

DOI: 10.5547/ISSN0195-6574-EJ-Vol26-No1-4

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