M. W. Luke Chan

Modeling Ontario Regional Electricity System Demand Using A Mixed Fixed And Random Coefficients Approach

Abstract In examining the municipal peak and kilowatt-hour demand for electricity in Ontario, we begin by exploring the issue of homogeneity across geographic regions. A common model across municipalities and geographic regions cannot be supported by the data. We consider various procedures which deal with this heterogeneity and yet reduce the multicollinearity problems associated with regional specific demand formulations. The recommended model controls for regional differences assuming that the coefficients of regional-seasonal specific factors are fixed and different while the coefficients of economic and weather variables are random draws from a common population for any one municipality by combining the information on all municipalities through a Bayes procedure.

Time-of-Use Prices and Electricity Demand: Allowing for Selection Bias in Experimental Data

We address self-selection in time-of-use experiments. Our methodology is especially appropriate when 1) theory does not provide an exclusion restriction between the participation and consumption equations, or 2) the demand system contains a large number of parameters estimated from a difficult objective function. We find that correcting for selection bias is important. Generally, small commercial establishments are not very responsive to time-of-use pricing. However, for some subgroups (such as those with neither electric heating nor air conditioning), significant responsiveness occurs given a sufficiently short peak period and a sufficiently large peak/off-peak price differential.

An index number framework for explaining changes in input productivity– an application to energy efficiency

Various methods have been used for describing and explaining movements in a specific inputs productivity or effiency. The following discussion provides and index number framework for breaking down energy efficiency into its components - the changing input mix along with technological change. This neoclassical discrete growth accounting approach is applied to the Canadian agricultural sector during a time period in which energy prices were both stable and volatile.

An integrated monthly and hourly regional electricity model for Ontario, Canada☆

Abstract For constructing an integrated electricity demand model, we propose using a mixed fixed and random coefficient approach. This allows us to control for the regional differences in order that common responses to changes in climate and socio-economic factors can be consistently estimated. The model is estimated in three stages for municipal utilities in the Province of Ontario, Canada. Monthly kilowatt-hour and kilowatt demands are examined in the first stage. In the second stage, municipal load profiles are estimated holding economic and regional specific variables constant. In the third stage, differences in load patterns over time and across municipalities are explained as functions of economic activity, customer mix and relative energy prices.

Measuring returns to scale and technological change in co-operative banks: A provincial analysis of Canadian credit unions and caisses populaires

In Canada economies of scale in credit unions come not only from large single office arrangements but from external economies realized from belonging to central provincial credit unions. Making use of aggregate provincial time series and cross-sectional data, this study begins by employing a sequential Akaikes Information Criterion (AIC) test to select the most appropriate model. This procedure permits the isolation of economies of scale from technological change effects. For all provinces, economies of scale are discovered to be significantly different from 1, and for five of the eight provinces examined, technological change was statistically significant from zero. The larger the provincial organization, as illustrated by the Quebec caisses populaires, the higher we find estimates of returns to scale and technological change. An implication may be that both expansion and more centralization should be encouraged and that other provinces may be able to increase efficiency by imitating some of Quebecs operational and administrative practices.

Expectation Formation and Portfolio Models for Life Insurers

Using a simple rational expectation model, this study outlines the procedures to linearize the nonlinear maximum likelihood estimation for asset demand functions. The technique allows the use of valuable information provided by the mean-variance theory and by the data. By way of example, a Canadian life insurer was used to carry out the analysis.

Technological change and economies of scale in Canadian financial institutions: A selection from competing hypotheses

Abstract This study isolates economies of scale from technological change in Canadian financial institutions. By employing the most general translog cost function and by using a sequential Akaikes information criterion test, we select the most appropriate model from 127 possible hypotheses. The results suggest that there exist increasing returns to scale and that technological change is not Hicks-neutral. In fact, technological change has resulted in greater relative expenditures on physical capital. These results suggest that further integration, centralization, and sharing of technology would be benificial in the Canadian financial industry.