HOUSEHOLD PRODUCTION AND THE SHORT-RUN AND LONG-RUN DEMAND FOR ELECTRICITY

This paper deals with the residential demand for electricity. A theoretical model is formulated which is based on intertemporal optimization in a household production context. The model is estimated using a dynamic version of the PLS (partial-least-squares) approach. Most important determinants of electricity consumption are the prices of appliances and of those goods which can either be purchased in the market or produced at home. The dynamic interrelationship between capital stock and electricity consumption is also an important element of the estimated model. © 1990.