Non-linearities in Electricity Demand and Temperature: Parametric versus Non-parametric Methods.

This paper investigates the relationship between outside air temperature and the residential demand for space heating energy. These nonlinearities are investigated empirically using high frequency panel data for a sample of U.K. households, and both parametric and nonparametric methods for identifying nonlinearities are examined. The econometric evidence finds support for important nonlinearities across the range of observed temperatures and points to limitations in the use of parametric functional forms. Copyright 1997 by Blackwell Publishing Ltd