Econometric model of the joint production and consumption of residential space heat

Thesis/Dissertation · Tue Jan 01 04:00:00 EST 1985

OSTI ID:5167337

Klein, Y L

This study models the production and consumption of residential space heat, a nonmarket good. Production reflects capital investment decisions of households; consumption reflects final demand decisions given the existing capital stock. In the model, the production relationship is represented by a translog cost equation and an energy factor share equation. Consumption is represented by a log-linear demand equation. This system of three equations - cost, fuel share, and final demand - is estimated simultaneously. Results are presented for two cross-sections of households, surveyed in 1973 and 1981. Estimates of own price and cross-price elasticities of factor demand are of the correct sign, and less than one in magnitude. The price elasticity of final demand is about -0.4; the income elasticity of final demand is less than 0.1. Short-run and long-run elasticities of demand for energy are about -0.3 and -0.6. These results suggest that price-induced decreases in the use of energy for space heat are attributable equally to changes in final demand and to energy conservation, the substitution of capital for energy in the production of space heat. The estimated model is used to simulate the behavior of poor and nonpoor households during a period of rising energy prices. This simulation illustrates the greater impact of rising prices on poor households.

• Research Organization: California Univ., Berkeley (USA)
• OSTI ID: 5167337
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
292000 -- Energy Planning & Policy-- Supply
Demand & Forecasting
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320101* -- Energy Conservation
Consumption
& Utilization-- Residential Buildings-- (-1987)
BUILDINGS
CONSUMPTION RATES
DEMAND
ECONOMIC ANALYSIS
ECONOMICS
ENERGY CONSERVATION
ENERGY CONSUMPTION
ENERGY DEMAND
ENERGY SUBSTITUTION
HEATING
MATHEMATICAL MODELS
PRODUCTION
RESIDENTIAL BUILDINGS
SPACE HEATING