Consumer Choice Modeling

To model consumer decision-making during the appliance purchase process, the EES group developed a consumer choice model that uses a logit decision probability function whose econometric parameters are calibrated to historical trends. Inputs to consumer decision-making include appliance retail and installation costs, as well as forecasts of macroeconomic variables, such as household income and housing construction. Using this model, EES generates disaggregated shipment forecasts for a 30-year period, beginning with the expected compliance date of any standards. The method provides an explicit quantitative approach to modeling regulatory impacts. Furthermore, it demonstrates a generic framework that can be applied to a wide range of appliance and policy initiatives.