A stochastic Bass innovation diffusion model for studying the growth of electricity consumption in Greece

SUMMARY In this paper a stochastic innovation di⁄usion model is proposed derived by introducing stochasticity into the well-known Bass model. The stochastic model is solved analytically by using the theory of reducible stochastic di⁄erential equations and the first moment of the resulting stochastic process is presented. The parameter estimators of the model are derived by using a procedure which provides the maximum likelihood estimators (MLE) using time series data. Finally, the model is applied to the data of electricity consumption in Greece. Using a simulation technique, it is possible to predict the performance of the consumption process by defining a subdomain to which all possible trajectories of the process should belong with a predefined probability. ( 1997 by John Wiley & Sons, Ltd.

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