The Use of Exploratory Methods in Ecomonic Analysis: Analyzing Residential Energy Demand

Publisher Summary Exploratory data analysis is a set of methods designed to examine and describe the structure of data. The exploratory approach, or mode, involves the use of descriptive techniques and the intuition of the analyst to investigate the structure of data. Unlike the confirmatory approach, or mode, which relies on classical statistical analysis and data to confirm and reformulate theory through the vehicles of parameter estimation and hypothesis testing, the exploratory mode uses data to suggest theory through the vehicle of informal data examination. In some sense, it can be considered a prelude to classical statistical analysis. It is suggested that the exploratory mode is an important supplement to the confirmatory mode for the analysis of economic phenomena in areas, such as residential energy demand, in which the degree of prior belief in the available empirical theory or the quality and comprehensiveness of the available data may not be sufficient to allow adoption of the strong axiomatic structures associated with most classical statistical techniques.