Answer to Question #100829 in Macroeconomics for bai kamara

Question

you have been assigned as an economist to estimate the consumption function for electric power for household in your country from december 2010 to december 2013 explain the major steps you would adopt in writing the research proposal for this consumption function . in your proposal indicate with reason the type of data you would be relying on to estimate the consumption function

Answer 1

Electricity consumption by the population and industrial enterprises depends on many factors: temperature, time of day (light / dark), weather conditions (in cloudy weather people are more likely to stay at home), etc.

Getting energy to vital facilities can lead to catastrophic losses and loss of money to prevent crisis situations.

The solution to this problem can be carried out in two ways. The first stage consists in studying the condition of the equipment, as well as in predicting the state for several periods ahead. This approach requires the creation of an information collection system and the long-term work of experts and analysts. The result is quite time-consuming. But at the same time, he cannot completely abandon the risks.

An alternative way is to predict electricity consumption. As a rule, specialists are aware of the potentialities of the power supply networks and the information that the predicted expert results of possible breakdowns are sufficient for this. This way requires little financial cost or significant time to collect representative samples. The information needed for forecasting is collected by sensors in power plants or utilities. This approach gives less stable results, but they appear in a much shorter period of time.

Maximum effect in protecting and minimizing risk: You cun use the STATISTICA system for forecasting electricity consumption.