The Econometric SocietyEdited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262
Econometrica: Mar, 1984, Volume 52, Issue 2
https://doi.org/0012-9682(198403)52:2<345:AEAORE>2.0.CO;2-Y
p. 345-362
Daniel L. McFadden, Jeffrey A. Dubin
Recent micro-simulation studies of the demand for electricity by residences have attempted to model jointly the demand for appliance and the demand for electricity by appliance. Within this context it becomes important to test the statistical exogeneity of appliance dummy variables typically included in demand for electricity equations. If, as the theory would suggest, the demand for durables and their use are related decisions by the consumer, specifications which ignore this fact will lead to biased and inconsistent estimates of price and income elasticities. The present paper attempts to test this bias using a subsample of the 1975 survey of 3249 households carried out by the Washington Center for Metropolitan Studies (WCMS) for the Federal Energy Administration. We discuss and derive a unified model of the demand for consumer durables and the derived demand for electricity. To determine the magnitude of the bias resulting from estimating a unit electricity consumption (UEC) equation by ordinary least squares when unobserved factors influence both choice of appliances and intensity of use, we introduce and estimate a joint water-heat space-heat choice model, and conclude with the consistent estimation and specification of demand for electricity equations.
March 5, 2024
The terms of the Editors of the Econometric Society's three journals end June 30, 2025. We are pleased to announce the incoming Editors and to thank the outgoing Editors for their excellent and continuing service.
Econometrica: Since 2019, Guido Imbens has served as the 14th Editor of Econometrica. On July 1, 2025, Marina Halac will become the Editor.
Quantitative Economics: Stéphane Bonhomme has been the Editor of Quantitative Economics since 2021. His successor will be Bernard Salanié.
Theoretical Economics: The Editor of Theoretical Economics since 2021 has been Simon Board. Taking over for him in July 2025 will be Federico Echenique.
Guido, Stéphane, and Simon have been outstanding Editors. We are grateful to them for the work they have done and will continue to do, and we look forward to further congratulating them next year. We believe Marina, Bernard, and Federico will be outstanding successors and we thank them in advance for their service.
Finally, we are grateful to Larry Samuelson for chairing all three search committees, and we thank the search committee members for their hard and fruitful work:
Econometrica: Christian Dustmann, Lars Hansen, Alessandro Lizzeri, George Mailath, Ariel Pakes, Helene Rey, and Elie Tamer.
QE: Kate Ho, Michael Keane, Felix Kubler, Whitney Newey, and Frank Schorfheide.
TE: Jeff Ely, Johannes Horner, Gilat Levy, Meg Meyer, and Ran Spiegler.
