Price Elasticity of Electricity Demand - Department for Energy ...
Price Elasticity of Electricity Demand - Department for Energy ...
Price Elasticity of Electricity Demand - Department for Energy ...
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Simplifying Assumptions<br />
Kentucky<br />
<strong>Energy</strong> and<br />
Environment<br />
Cabinet<br />
Executive<br />
Summary<br />
Variables<br />
Assumptions<br />
Conclusion<br />
Appendix<br />
Diagnostic Plots<br />
Models<br />
References<br />
Linearity. Q = β 0 + β 1 P + Xβ + ɛ<br />
Constant Variance. Var(ɛ i ) = σ 2 , <strong>for</strong> i = 1, . . . , N<br />
Normality. ɛ i ∼ iid N(0, σ 2 ), <strong>for</strong> i = 1, . . . , N<br />
No misspecification. All relevant predictors <strong>of</strong> Q included<br />
in the model, and linearity and additivity <strong>of</strong> predictors.<br />
<strong>Price</strong> Exogenous. P implies Q, but not vice-versa<br />
E d constant over time.<br />
Kentucky <strong>Energy</strong> and Environment Cabinet
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