Product Shipments Forecasting

Cost-benefit analyses of appliance energy efficiency standards require an estimate of their impacts on appliance shipments. The EES group has developed a shipment forecasting technique for appliances that generates an accounting of the purchase, repair, and replacement of appliances by fuel type and efficiency level, under different regulatory scenarios. Shipments projections are developed based on an analysis of key market drivers for the appliances or equipment under consideration.

The shipments model contains a component for keeping track of existing appliance stock, vintage, and failure rate and, in some cases, a component for explicitly modeling consumer decision-making. Consumer choice is modeled with a logit decision-probability function whose econometric parameters are calibrated to historical trends in market share. Inputs to the shipments modeling include appliance retail, installation, and operating costs, as well as forecasts of relevant macroeconomic variables, such as construction rates and energy prices.

In this way, shipments of appliances at different efficiency levels are forecast for a 30-year period beginning with the expected compliance date of any new 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 appliances and policy initiatives.