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corrected for the measurement scale of the variables. At the sample means
of the model variables, the choice probabilities of traditional, traditional
with storage and co-generator are 90%, 3% and 7%, respectively. The
elasticity estimates indicate that the price of energy has a large positive
impact on the probability of adopting a co-generator; the probability of
adopting traditional heating and storage decreases, although the effect is
substantially smaller in absolute terms. The probability of investments in
traditional with storage and co-generator decrease elastically with respect
to the amount of capital in the structures. Capital invested in machinery
and installations has a large positive impact on the adoption of a co-
generator, whereas the impact on traditional and traditional with storage is
more inelastic. The probability of investing in co-generators increases
elastically with labour but decreases with firm size.
6. CONCLUSION AND DISCUSSION
This chapter has applied a Monte Carlo simulation technique to estimate
energy saving technology choices by Dutch glass house firms. The
estimation technique allows for serially correlated errors and firm specific
effects in modelling choices and is applied to panel data over the period
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