Study in econometrics : The demand for electricity in the united States

This study was originally made for the General Electric Corporation and completed in the fall of 1959. It was designed to show what modern econometric methods could contribute to the understanding of the forces shaping the demand for electricity. The Corporation had, of course, regularly made forecasts of the growth in demand, in connection with its analyses of markets. However, these forecasts were generally based on correlations of total electricity output with such aggregates as gross national product or industrial production, and threw no light on the mechanisms underlying the growth of demand and the circumstances under which past relations between electricity output and aggregate output might be expected to change. The Research Laboratory, to which I was a consultant, expressed an interest in the possibility that a more elaborate analytical technique might yield deeper insights into the probable future course of demand. I asked Professor Fisher to undertake the study, and offered him such assistance as I could. He is responsible for the whole of the econometric technique, which is a major part of any contribution of the study. I provided something in the way of collaboration in shaping the hypotheses that were tested, and in serving as an audience of more or less critical power on whom Professor Fisher tried out his models. In so asymmetrical a collabo ration, I think it fair to say that I am equally responsible with him for the defects of the study, but that he deserves most of the credit for its merits.

We are both indebted to the General Electric Corporation for financial support, and for the patience, interest, and assistance in finding data of Drs. Kenneth Kingdon and Leslie Cook, the suc cessive directors of the Project Analysis Section of the Research Laboratory during the course of the study.