Abstract :
Econometric practitioners must always make the case that existing data may be used to forecast future responses to price changes. In residential electricity markets this means providing assurances that either territories with different prices are similar enough to be used as a guide, or that households are still able to react to price changes with the same conservation measures they have in the past. This article presents the results of a conservation behavior survey conducted both concurrent with and immediately after the last California electricity crisis in 2000–2001. The survey used open-ended questions that provide some assurance that there are still conservation behaviors that may be performed, as well as raw data that may be used to construct new closed-ended questions. The prevalence of conservation behaviors is modeled with a forgetfulness process, necessary when using data from open-ended questions, and implemented with a generalized method of moments (GMM) estimator.
