Abstract
A theoretical model and a two-stage econometric estimation procedure are proposed for determining the parameters of industry-region-specific cost, input-demand, or other functions using grouped data. The model and estimation procedure are appropriate when only marginal totals or averages are available, or when data are classified by both region and industry but many cells are empty or sparsely represented. An application is reported in which load functions for the hourly input of electricity are estimated for each day of the week and each month of the year in each cell of a 31 × 7 industry-region matrix. The use of the model to simulate the sensitivity of electricity demand to regional location and weather variability is illustrated.
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The work reported in this paper was supported by Ontario Hydro. We acknowledge gratefully the cooperation and assistance of Evelyn L. Lawson of Ontario Hydro in the provision of data and other aspects of the project. Able research assistance was provided by Renqun Wang at McMaster University. Dean C. Mountain is a member of the McMaster School of Business; when the project began he was Superintendent of Load Research in the Rates Department of Ontario Hydro. The other authors are associated with the McMaster Department of Economics. The authors thank the reviewers and the editor for helpful comments on an earlier draft of the paper.
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Denton, F.T., Feaver, C.H., Mountain, D.C. et al. Industry-region load profiles: econometric estimation based on marginal totals. Ann Reg Sci 30, 223–246 (1996). https://doi.org/10.1007/BF01581974
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DOI: https://doi.org/10.1007/BF01581974