| dc.description.abstract | The effects of alternative public policies on the consumption and
prices of various forms of energy in the United States depends critically
on the nature of consumer demands for fuels and the supply characteristics
of these fuels. Previous work on energy demand has tended to concentrate
on the demand for a particular fuel as determined by standard economic
variables such as the price of the fuel, income levels, sometimes the
price of alternative fuels, and other demographic characteristics of the
consuming population. In this work the consumer decision making process
is viewed as being composed of two steps. First, the consumer decides
that he wants a particular service and, secondly, seeks to find the fuel
that will provide this service most cheaply. This view leads us to concentrate on substitution possibilities among fuels for particular services
rather than own-price elasticities for a particular fuel.
This paper presents results for the determinants of energy consumption in the residential and commercial sector in the United States.
First, a discussion of the conceptual model used for fuel choice decisions
is presented. Then, empirical results are given for appliance choices in
the residential sector for four selected appliances and for the "fuel-split"
of aggregate energy consumption among the three fuels used in the residential
and commercial sector. The own-price and cross-price elasticities are
estimated and discussed.
Next, the paper discusses the determinants of total energy demand
in the residential and commercial sector and presents empirical results
for a simple flow adjustment model. The long run price elasticity of total
demand in this sector is estimated to be about -0.5 while the short run
(one year) value is -0.15. Finally, the estimated relationships are used
to make projections to 1980 for alternative price scenarios. These results
show that significant consumption responses to changing fuel prices can be
expected and, further, that some states are much more dramatically impacted
than others. | en |
