Energy Demand with Declining Rate Schedules: An Econometric Model for the U.S. Commercial Sector

Frank T. Denton, Dean C. Mountain and Byron Spencer

Land Economics, 2003, vol. 79, issue 1, 86-105

Abstract: We specify and estimate a model of the demand for electricity and natural gas in commercial buildings using data from the Commercial Building Energy Consumption Survey. Although not observed, declining rate schedules are approximated by a downward sloping function fitted to billing data for individual survey units. Marginal prices (rates), temperature variables and a large number of building characteristics are incorporated into the model as explanatory variables. Demand and rate schedule equations constitute a simultaneous system, with prices and quantities jointly determined. The effects on price elasticities of using (endogenous)marginal rather than (exogenous) average prices are estimated to be quite large.

JEL-codes: Q41 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (9)

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