Demand Forecasting

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Demand forecasts1 are used for setting price controls for energy and water and could be used in telecommunications. Several methods of demand forecasting are available. Trend analysis expresses demand largely as a function of time. There is general consensus that trend analysis is too simplistic for most countries. End-use method develops demand projects by examining the number of devices in households and businesses that use the utility service. For example, an energy demand forecast would consider the number of household appliances that use energy and the amount of energy that each appliance is expected to use. The econometric approach uses statistical analyses to forecast demand based on household income levels, use-intensive industries, and prices, to name a few of the possible variables. Time-series methods are similar to the econometric approach, but incorporate the effects that one time period has on subsequent time periods. Hybrid approaches are also used.

Footnotes

  1. See the reference section for Demand Forecasting.