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Indian Power Sector Demand and supply

Indian Power Sector Demand and supply

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Managerial Economics Final Project

AKSHAT VAID - 91004 CIJIL DICLAUSE - 91014 GOURAB KUNDU - 91020 HARSHDEEP GARG -91023 SAMARTH GULATI - 91047
FMG XVIII A FORE SCHOOL OF MANAGEMENT

Managerial Economics Final Project Report September 2009

2

Preface

T

he Indian power sector is such a magnanimous entity in itself that deciphering the intricate nuances of the sector becomes synonymous to fishing in the dark. Never the less, this project is an earnest attempt made to unravel the dilemma of the Indian Power Sector. India is such a diverse country both in terms of geography and demography that narrowing down to a few parameters that are responsible for the change/ alteration of the demand of power is next to impossible. Hence, a better approach in determining the power demand across India is to take into account the various seasonal variations as well as the influences of the different regions in India.

Acknowledgement
The group members would sincerely like to thank Dr. Ravikesh Srivastava for his unending support and motivation towards the execution of the project. Without his guidance, the report would not have taken the shape that it has taken at this moment. We’d also like to thank all the fellow students of FMG XVIII section A for their constant pep-talk and encouragement. Thanking one and all for all the help vented to the execution of the project. Gourab Kundu Samarth Gulati Cijil Diclause Akshat Vaid Harshdeep Garg

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009

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Table of Contents
1. Introduction 2. Project Objective 3. Project Methodology 4. Data and parameters 5. Simple Regression a. Per capita annual income in Rupees b. Population c. Price index with '93 as index of 100 d. Gross national Product 6. Multiple Regression Model a. Degree of Correlation b. Multiple Regression Model c. Multiple Regression Model Obtained d. Prediction according to multiple regression model of power in India 7. Moving Averages a. 3 year moving average b. 5 year moving average 8. Exponential Smoothing a. Dumping Factor/ Weight: 0.3 b. Dumping Factor/ Weight: 0.5 9. Seasonal Trend Analysis a. Region wise Analysis b. Equation for Regression c. Why Seasonal Variations? d. Trend analysis in North India e. Trend analysis in South India f. Trend analysis in North India g. Trend Analysis Regions/Seasons h. Power Trading 10. Arima and Analysis 11. Annexure

FORE School of Management – FMG XVIII A – Trimester 1

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1. Introduction
Indian power sector has attained insurmountable importance because of the huge boom in India’s economy. In fact, the visionary in Dr. Manmohan Singh has acknowledged the fact that it is electricity that is a driving factor for India’s economy. He was so forthright that he laid no stone unturned to have India sign the Indo-US Nuclear Civil Agreement. Perhaps power has become the most important commodity that needs to be taken into account for the estimation of India’s GDP. But a lot needs to be done in the Indian Power Sector. As a matter of fact just 44% of the rural households have access to electricity. This statement is both a danger and an opportunity for India. A lot of uncaptured demand for power can be tapped into hence, an industry as large as the Power sector awaits expansion of magnanimous proportions. Some facts and figures about the Indian Power Sector:  Due to India's economic upturn, the demand for energy in India has grown at an average of 3.6% per annum in the past 30 years.  The theft of electricity, a common phenomenon in most parts of urban India amounts to about 1.5% of India's total GDP.  India is world's 6th largest energy consumer, accounting for 3.4% of global energy consumption.  Electricity losses in India during transmission and distribution are extremely high and vary between 30 to 45%.  Electricity demand outstripping supply by 7-11%, is a trend in the past few years. The government policy to date: 100% FDI is permitted in generation, transmission and distribution of power. The Government is inclined to draw private investment in the sector. The various kinds of projects that are/will be undertaken in the coming months/years in India:  Hydro Projects  Ultra Mega Power Projects  Nuclear Power  Rural Electrification  Renewable Sources of Energy

FORE School of Management – FMG XVIII A – Trimester 1

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2. Project Objective
The project objectives have been classified as follows:  Forecasting the demand of power in the coming years 2009-10, 2010-11, 2011-12.  Understanding the intricacies of the Indian Power Sector by looking into the various geographical regions.  Collating data that establishes the influence of seasons on the demand of power in India.

3. Project Methodology
The following tools have been used to determine the demand of power in India:  Simple Regression  Multiple Regression Model  Moving Averages  Exponential Smoothing  Seasonal Trend Analysis (by Region)  Auto Regression Integrated Moving Averages (ARIMA)

4. Data and parameters
Data used for tenure  1981 to 2008 Parameters considered:  Per Capita Income in India in Rupees  Population of India  Price Index of electricity with 1993 as Index = 100  (GNP) Gross National Product in Rupees

FORE School of Management – FMG XVIII A – Trimester 1

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5. Simple Regression
In statistics, linear regression refers to any approach to modeling the relationship between one or more variables denoted y and one or more variables denoted X, such that the model depends linearly on the unknownparameters to be estimated from the data. Such a model is called a "linear model." Most commonly, linear regression refers to a model in which the conditional mean of y given the value of X is an affine function of X. Less commonly, linear regression could refer to a model in which the median, or some other quantile of the conditional distribution of y given X is expressed as a linear function of X. Like all forms of regression analysis,linear regression focuses on the conditional probability distribution of y given X, rather than on the joint probability distribution of y and X, which is the domain of multivariate analysis. Linear regression was the first type of regression analysis to be studied rigorously, and to be used extensively in practical applications. The reason for this is that models that depend linearly on their unknown parameters are easier to fit than models that are related non-linearly to their parameters and the statistical properties of the resulting estimators are easier to determine. Linear regression has many practical uses. Most applications of linear regression fall into one of the following two broad categories:

If the goal is prediction, or forecasting, linear regression can be used to fit a predictive model to an observed data set of y and X values. After developing such a model, if an additional value of X is then given without its accompanying value of y, the fitted model can be used to make a prediction of the value of y. If we have a variable y and a number of variables X1, ..., Xp that may be related to y, we can use linear regression analysis to quantify the strength of the relationship between y and theXj, to assess which Xj may have no relationship with y at all, and to identify which subsets of the Xj contain redundant information about y, so that once one of them is known, the others are no longer informative.

Linear regression models are often fit using the least squares approach, but may also be fit in other ways, such as by minimizing the "lack of fit" in some other norm, or by minimizing a penalized version of the least squares loss function as in ridge regression. Conversely, the least squares approach can be used to fit models that are not linear models. Thus, while the terms "least squares" and linear model are closely linked, they are not synonymous.

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a. Per capita annual income in Rupees Coefficients Intercept (a) -2299699.673 Year (b) 1159.777846 Y* = a + b X* Projected Values for 2009 (Y*) 30294.01984 for 2010 31453.79769 for 2011 32613.57553 b. Population Intercept (a) Year (b) Y* = a+ b X* Projected Values for 2009 (X*) for 2010 for 2011

-35404582017 18211019.86

1181356876 1199567896 1217778916

c. Price index with '93 as index of 100 Intercept (a) - 20920.70602 Year (b) 10.55749863 Y* = a + b X* Projected Values for 2009 (X*) 289.3087302 for 2010 299.8662288 for 2011 310.4237274 d. Gross national Product Intercept (a) -298672038 Year (b) 150468.8985 Y* = a + b X* Projected Values for 2009 (X*) 3619978.992 for 2010 3770447.891 for 2011 3920916.789

FORE School of Management – FMG XVIII A – Trimester 1

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6. Multiple Regression Model
Data used for tenure 1981 to 2008 (28 observations) Parameters considered (4): Degree of freedom = 24  Per Capita Income in India in Rupees  Population of India  Price Index of power with 1993 as 100  Gross National Product (GNP) in Rupees a. Degree of Correlation Coefficients of correlation (r) Calculated by doing a regression using the power demand (Y) and individual parameters(X). The value of R2 (coefficient of determination is thus determined) Square root of R2 Per Capita Income = 0.9544 Population of India Price Index of power Gross National Product = 0.9955 = 0.9719 = 0.9706

b. Multiple Regression Model Y* = a + b1 X1 + b2 X2 + b3 X3 + b4 X4 Where, Y* = Estimated demand a = coefficient of Regression b1 = coefficient of X1 b2 = coefficient of X2 b3 = coefficient of X3 b4 = coefficient of X4 X1 = Per Capita Income X2 = Population X3 = Price Index X4 = GNP c. Multiple Regression Model Obtained Y* = -221590.9 + (-4.32) X1 + 0.0005X2 + (-280.11)X3 (-3.20210696) (-1.85033966) (5.1014939) (-1.2485916) Figures given in braces are that of the t-statistic value d. Prediction according to multiple regression model of power in India 2009: 2010: 2011: 4,78,432.1569 GWH 4,93,186.5125 GWH 5,07,940.8682 GWH

+ 0.092X4 ( 6.4988346)

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009

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7. Moving Averages
In statistics, a moving average, also called rolling average, rolling mean or running average, is a type of finite impulse response filter used to analyze a set of data points by creating a series of averages of different subsets of the full data set. A moving average is not a single number, but it is a set of numbers, each of which is the average of the corresponding subset of a larger set of data points. A moving average may also use unequal weights for each data value in the subset to emphasize particular values in the subset. A moving average is commonly used with time series data to smooth out short-term fluctuations and highlight longer-term trends or cycles. The threshold between shortterm and long-term depends on the application, and the parameters of the moving average will be set accordingly. For example, it is often used in technical analysis of financial data, like stock prices, returns or trading volumes. It is also used in economics to examine gross domestic product, employment or other macroeconomic time series. Mathematically, a moving average is a type of convolution and so it is also similar to the low-pass filter used in signal processing. When used with non-time series data, a moving average simply acts as a generic smoothing operation without any specific connection to time, although typically some kind of ordering is implied. A simple moving average (SMA) is the unweighted mean of the previous n data points. For example, a 10-day simple moving average of closing price is the mean of the previous 10 days' closing prices. If those prices are then the formula is

When calculating successive values, a new value comes into the sum and an old value drops out, meaning a full summation each time is unnecessary,

Results and Analysis a. 3 year moving average: 2009: 4,60,756.7 GWH b. 5 year moving average: 2009: 4,30,058.2 GWH

Root Mean Square Error = 33380

Root Mean Square Error = 39384

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009

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8. Exponential Smoothing
In statistics, exponential smoothing is a technique that can be applied to time series data, either to produce smoothed data for presentation, or to make forecasts. The time series data themselves are a sequence of observations. The observed phenomenon may be an essentially random process, or it may be an orderly, but noisy, process. Whereas in the simple moving average the past observations are weighted equally, exponential smoothing assigns exponentially decreasing weights as the observation get older. Exponential smoothing is commonly applied to financial market and economic data, but it can be used with any discrete set of repeated measurements. The raw data sequence is often represented by {xt}, and the output of the exponential smoothing algorithm is commonly written as {st } which may be regarded as our best estimate of what the next value of x will be. When the sequence of observations begins at time t = 0, the simplest form of exponential smoothing is given by the formulas where α is the smoothing factor, and 0 < α < 1. The simplest form of exponential smoothing is given by the formulae

where α is the smoothing factor, and 0 < α < 1. In other words, the smoothed statistic st is a simple weighted average of the latest observation xt and the previous smoothed statistic st−1. Simple exponential smoothing is easily applied, and it produces a smoothed statistic as soon as two observations are available. Values of α close to one have less of a smoothing effect and give greater weight to recent changes in the data, while values of α closer to zero have a greater smoothing effect and are less responsive to recent changes. There is no formally correct procedure for choosing α. Sometimes the statistician's judgment is used to choose an appropriate factor. RESULTS AND ANALYSIS a. Dumping Factor/ Weight: 0.3 2009: 4,44,535.0 GWH b. Dumping Factor/ Weight: 0.5 2009: 4,31,461.7 GWH

Root Mean Square Error = 29597

Root Mean Square Error = 31517

FORE School of Management – FMG XVIII A – Trimester 1

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9. Seasonal Trend Analysis
a. Region wise Analysis Estimation of Power for a particular month (Here a month has been taken as a benchmark for a season) the months taken into account are:  January  April  July  October b. Equation for Regression: Y* = a + b X* Where, Y* = Estimated value of Demand of power in Regional India X* = Year in which the estimation is being done a = constant of regression b = coefficient of X c. Why Seasonal Variations? Seasonal variation has been done by using data of the last five years with respect to 4 regions in India. For incorporating this seasonal variations we can either use  Ratio to trend method  Dummy variable method We did by ratio to trend method and is based on the assumptions that past trends and seasonal patterns in data will persist.

FORE School of Management – FMG XVIII A – Trimester 1

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d. Trend analysis in North India
Estimated Demand for Power in MWH Month Seasonal Adjustment Factor 2009 Estimated Value 35585.5 33490.5 37834.3 Adjusted Value 35584.4 33484.7 37835.1 2010 Estimated Value 37695.2 35666 40126.4 Adjusted Value 37694.0 35659.8 40127.2 2011 Estimated Value 39804.9 37841.5 42418.5 Adjusted Value 39803.7 37834.9 42419.4

January

0.99994 0.99995 1.00002

April July

October

0.99998

34627.1

34621.6

36549

36543.2

38470.9

39803.7

e. Trend analysis in South India
Estimated Demand for Power in MWH Month Seasonal Adjustment Factor 2009 Estimated Value Adjusted Value 2010 Estimated Value Adjusted Value 2011 Estimated Value Adjusted Value

January

0.99998 0.99998 1.00009 0.99997

29421 29317.5 27337 29120.5

29413 29314.1 27336.6 29114.3

31081 30924 28916.4 30964

31076.8 30920.4 28916 30957.4

32741 32530.5 30495.8 32807.5

32736.6 32526.7 30495.3 32800.5

April July
October

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009

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f. Trend analysis in North India
Estimated Demand for Power in MWH Month Seasonal Adjustment Factor 2009 Estimated Value Adjusted Value 2010 Estimated Value Adjusted Value 2011 Estimated Value Adjusted Value

January

1. 0005 1. 0006 1. 0002 1. 0005

1694. 9 1720. 8

1695. 77 1818. 3 4 1819. 2 9 1941. 78 1942 . 77 1721. 89 1835. 5 2 1836. 6 4 1908. 54 1908 . 99

April July
October

1789. 29 1987. 69 1908. 5 4 1908. 9 9 2027. 81 2028 . 28 1911. 47 1912. 59 2062. 6 2 2063. 8 1 2213. 75 2215 . 04

g. Trend Analysis Regions/Seasons  Geographical factors have a huge say in the demand of power in India.  Temperature and rainfall have a direct correlation with the rise/fall of demand.  Uniformity of demand in power is absent in India.  The Concept of Power Trading can be employed: regions of surplus can trade power with states running in deficit.

h. Power Trading  Power trading inherently means a transaction where the price of power is negotiable and options exist about whom to trade with and for what quantum.  In India, power trading is in an evolving stage and the volumes of exchange are not huge.  The Electricity Act, 2003, mandated development of power markets by appropriate commissions through enabling regulations  In India, while there is a huge section of consumers, who are power deprived, there are a lot of Power Plants that are under utilized  The emerging trends will help in proper flow of power from surplus regions to deficit regions and thus try to bring about a balance in the power sector  PTC India Ltd. (PTC), is the leading provider of power trading solutions in India.
FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009

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10. Arima and Analysis
In statistics and signal processing, autoregressive moving average (ARMA) models, sometimes called Box-Jenkins models after the iterative Box-Jenkins methodology usually used to estimate them, are typically applied to time series data. Given a time series of data Xt, the ARMA model is a tool for understanding and, perhaps, predicting future values in this series. The model consists of two parts, an autoregressive (AR) part and a moving average (MA) part. The model is usually then referred to as the ARMA(p,q) model where p is the order of the autoregressive part and q is the order of the moving average part. As for our case, we had chosen data for the past 57 years to apply ARMA. For applying ARMA, we used an add inn in the the software MS EXCEL. There we tried various combinations of the values of p and q but p=2 and q=5 was the best fit one as it showed the least values of mean absolute percentage errors(MAPE).The model then obtained was as follows:timeseries: y Method: Nonlinear Least Squares (Levenberg-Marquardt) date: 09-07-09 time: 19:40 Included observations: 55 p = 2 - q = 5 - no constant - autoselection (AIC) Coefficient AR(1) AR(2) MA(1) MA(2) MA(3) MA(4) MA(5) 0.397428032 0.716593943 1.095130154 0.533752611 0.882860313 1.080898221 0.585551794 Std. Error 0.18841621 0.200329027 0.158698018 0.108851108 0.035104024 0.153486824 0.116176175 t-Statistic 2.109309127 3.577084936 6.90071729 4.903511072 25.14983223 7.042286719 5.040205458 Mean dependent var S.D. dependent var Akaike info criterion Schwarz criterion Durbin-Watson stat Prob. 0.040159332 0.000805756 1.044E-08 1.11893E-05 -2.22045E-16 6.33377E-09 7.02898E-06

R-squared Adjusted squared

0.999081 R0.998966

133354.323273 128580.853224 19.258835 19.514314 1.845670

S.E. of regression 4134.981337 Sum squared resid 820707391.547770 Log likelihood -522.617969

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009 But even in this graph we had one portion where the model did not fit very well instead the spike over their showed huge deviation from the actual value. This caused deviation not just in the portion where it was present, but the deviation it caused deviation in the whole of the model. This is shown below.

15

Residualplot
15000
10000 5000 0

0
-5000 -10000 -15000 -20000

10

20

30

40

50

60

Residual

To remove this error we followed outlier deletion as per which the value which had caused an unacceptable deviation is removed from the data and the same process is again applied upon. The results were encouraging as shown below.

Residualplot
20000 15000 10000 5000 0 -5000 -10000 -15000 -20000 0 10 20 30 40 50 60 Residual

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009 We just removed one entry from the 57 that we had taken initially [1.75% sampling] and in the process the MAPE reduced from 0.077 to 0.05 and at the same time the Median of Absol ute residuals {MAR} reduced from 2224 to 1308.

16

On the basis of the new model we obtained the following forecasts for the next 10 years.

Table Period 1 2 3 4 5 6 7 8 9 10 IR 1.000000 1.656811 2.202814 2.536284 2.592833 2.411722 1.972840 1.367065 0.632118 -0.116531 Forecast 504900.515272 560753.674775 621694.158683 685205.377056 750279.007608 814653.053112 877917.986331 939074.264170 998877.677111 1057891.283728

These values don’t fit very well if seen in light of the day as too steep an increase is predicted as per the model. The reason for this lies in the fact that ARIMA as a tool takes only the past values of a function into consideration. Any other external factor which may have a bearing on the actual results are not considered in the forecasts.

FORE School of Management – FMG XVIII A – Trimester 1

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11. Annexure
power demand in per capita India GWH income annual 90245 3456 95589 3598 102344 3740 144068 4024 123099 4308 135952 4592 145613 4876 160196 5160 175419 5444 190357 5728 207645 6012 220674 6440.25 238569 7698 259629 8955.75 277029 10213.5 280143 11471.25 296749 12729 309734 14682 312841 16635 316600 18588 322459 20541 339598 22494 360937 24447 386134 26400 411887 28353 425748 30306 440774 32259 453800 34212 Gross price with '93 National as Index = 100 product 31.4 61099 35 68959 37.9 79875 39.2 86543 43.9 99876 48.2 117812 52.4 196814 55.5 328004 59 459194 63.1 590384 70 721574 78.2 852764 100 983954 113.6 1115144 127.8 1246334 133.5 1377524 151.8 1508714 157.2 1639904 168.9 1771094 200 1902284 224.8 2077658 238 2244725 248.8 2519921 253 2855331 263.4 3249554 271.7 3643777 273 4038000 275 4432223

year 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

population 683329097 698362337 713726308 729428287 745475709 761876175 778637451 795767475 813274359 831166395 846421039 864534449 883035486 901932445 921233800 940948203 961084495 981651703 1002659050 1024115953 1028737436 1048797816 1069249373 1090099736 1111356681 1133028136 1155122185 1169266890

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Multiple regression data:
SUMMARY OUTPUT Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observations

G p

0.997742312 0.995489721 0.994705325 9025.442084 28

ANOVA df Regressio n Residual Total 4 23 27 SS 4.13522E+ 11 187354791 1 4.15395E+ 11 MS 1.0338E+1 1 81458604. 8 F 1269.11 6 Significanc eF 1.31E-26

Coefficien ts
Intercept per capita income annual populatio n price with '93 as Index = 100 Gross National product
-221590.9001

Standard Error
69201.59223

t Stat
-3.202107

P-value
0.003959

Lower 95%
-364745

Upper 95%
78436.5

Lower 95.0%
-364745

Upper 95.0%
78436.5

-4.320341501 0.000491486

2.334891044 9.63415E-05

-1.8503397 5.10149393

0.077153 3.63E-05

-9.15043 0.000292

0.50974 9 0.00069 1

9.15043 0.00029 2

0.50974 9 0.00069 1

-280.1083272

224.3394251

-1.2485916

0.224375

-744.19

183.973 1

-744.19 0.06239 2

183.973 1

0.091525749

0.014083409

6.49883463

1.24E-06

0.062392

0.12066

0.12066

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RESIDUAL OUTPUT MULTIPLE REGRESSION MODEL

Predicted power demanded in Observation India GWH Residuals 1 96121.23991 -5876.23991 2 102607.3771 -7018.37705 3 109731.8424 -7387.84242 4 116468.317 27599.68297 5 123032.223 66.77697032 6 130302.9811 5649.018877 7 143368.1945 2244.80547 8 161699.3073 -1503.30731 9 180103.5983 -4684.59833 10 198529.1208 -8172.1208 11 214874.0992 -7229.09923 12 231636.7706 -10962.7706 13 241196.7586 -2627.75864 14 253248.225 6380.774955 15 265330.3808 11698.6192 16 279996.465 146.5349797 17 291340.5364 5408.463629 18 303506.0771 6227.922901 19 314123.257 -1282.25704 20 319527.2864 -2927.2864 21 322465.6025 -6.60246845 22 335480.8687 4117.13129 23 359257.2408 1679.759227 24 390589.4664 -4455.4664 25 425767.7536 -13880.7536 26 461737.9942 -5989.99419 27 499876.6917 897.3082766 28 533912.3243 11887.67566

Standard Residuals -0.705422 -0.8425316 -0.8868846 3.31324517 0.00801634 0.67814491 0.26948103 -0.1804668 -0.5623696 -0.9810344 -0.867828 -1.3160422 -0.3154532 0.76598966 1.40437822 0.01759101 0.6492671 0.74764031 -0.1539305 -0.3514105 -0.0007926 0.49424718 0.20164921 -0.5348631 -1.6663358 -0.7190778 0.10771871 1.42707378

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Forecasting Per Capita Income Annually In India

Regression Statistics Multiple R 0.948678 R Square 0.899991 Adjusted R Square 0.896144 Standard Error 3240.844 Observatio ns 28

ANOVA df Regression Residual Total 1 26 27 SS 2.46E+0 9 2.73E+0 8 2.73E+0 9 MS 2.46E+09 10503071 F 233.976 3 Significanc eF 1.63E-14

Coefficients

Standard Error

t Stat

P-value

Lower 95%

Intercept year

-2299700 1159.778

151226 75.82089

-15.207 15.29628

1.87E-14 1.63E-14

-2610549 1003.926

Uppe r 95% 1988 8 1315. 2

Lower 95.0%
261054 9

Uppe r 95.0%
198885 0

1003.9 6

1315.6 3

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RESIDUAL OUTPUT

Observation 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Predicted per capita income annual -2179.76 -1019.98 139.7958 1299.574 2459.352 3619.129 4778.907 5938.685 7098.463 8258.241 9418.019 10577.8 11737.57 12897.35 14057.13 15216.91 16376.69 17536.46 18696.24 19856.02 21015.8 22175.57 23335.35 24495.13 25654.91 26814.69 27974.46 29134.24

Residuals 5635.76 4617.982 3600.204 2724.426 1848.648 972.8706 97.09278 -778.685 -1654.46 -2530.24 -3406.02 -4137.55 -4039.57 -3941.6 -3843.63 -3745.66 -3647.69 -2854.46 -2061.24 -1268.02 -474.797 318.4251 1111.647 1904.869 2698.092 3491.314 4284.536 5077.758

Standard Residuals 1.772105 1.452076 1.132046 0.856667 0.581288 0.305909 0.03053 -0.24485 -0.52023 -0.79561 -1.07099 -1.30101 -1.2702 -1.2394 -1.20859 -1.17778 -1.14698 -0.89756 -0.64814 -0.39872 -0.14929 0.100125 0.349546 0.598966 0.848386 1.097807 1.347227 1.596648

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population
SUMMARY OUTPUT
Regression Statistics Multiple R R Square Adjusted R Square Standard Error Observatio ns 0.999281057 0.998562631 0.998507347 5791797.75 28

y

ANOVA df Regressio n Residual Total 1 26 27 SS 6.06E+1 7 8.72E+1 4 6.07E+1 7 MS 6.06E+17 3.35E+13 F 18062. 6 Significan ce F 1.73E-38

Intercept year

Coefficient s 354045820 17 18211019.8 6

Standar d Error

t Stat

Pvalue 3.37E38 1.73E38

Lower 95%

Upper 95% 3.5E+10 184895 47

Lower 95.0% 3.6E+10 179324 93

Upper 95.0% 3.5E+10 184895 47

2.7E+08 135501. 5

-131.002 134.3972

-3.6E+10 17932493

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009

23

RESIDUAL OUTPUT OF PREDICTED POPULATION IN INDIA
Predicted population 671448320.3 689659340.2 707870360.1 726081379.9 744292399.8 762503419.6 780714439.5 798925459.3 817136479.2 835347499.1 853558518.9 871769538.8 889980558.6 908191578.5 926402598.3 944613618.2 962824638.1 981035657.9 999246677.8 1017457698 1035668717 1053879737 1072090757 1090301777 1108512797 1126723817 1144934837 1163145856 Standard Residuals 2.090387 1.531266 1.030336 0.588878 0.2082 -0.11036 -0.36544 -0.55564 -0.67953 -0.73565 -1.25582 -1.27299 -1.22196 -1.10128 -0.90943 -0.64492 -0.30617 0.108391 0.600397 1.1715 -1.21954 -0.89415 -0.49993 -0.03555 0.500373 1.109226 1.792433 1.076977

Observation 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Residuals 11880777 8702997 5855948 3346907 1183310 -627244 -2076988 -3157984 -3862120 -4181104 -7137480 -7235090 -6945072 -6259133 -5168798 -3665415 -1740143 616045.4 3412372 6658256 -6931281 -5081921 -2841384 -202041 2843884 6304320 1018748 6121034

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009

24

Predicted Price
y

Regression Statistics Multiple R R Square Adjusted Square Standard Error Observations R 0.950083 19.88692 28 0.97567 0.951932

ANOVA
df SS MS F Significance F

Regression Residual Total

1 26 27

203638.8 10282.73 213921.6

203638.8 395.4897

514.90 3

1.16E-18

Coefficien ts
Intercept year -20920.7 10.5575

Standar d Error
927.9742 0.465263

t Stat
-22.5445 22.69147

PLower value 95%
1.36E18 1.16E18 -22828.2 9.601137

Upper 95%
19013.2 11.5138 6

Lower 95.0%
22828.2 9.60113 7

Upper 95.0%
19013.2 11.5138 6

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009

25

RESIDUAL OUTPUT Standar d Residual s
1.931893 1.575376 1.182989 0.708615 0.408464 0.087816 -0.23796 -0.62009 -0.98174 -1.31263 -1.50005 -1.62085 -1.04476 -0.88886 -0.70221 -0.95112 -0.55438 -0.81866 -0.76011 0.292529 1.022346 1.157754 1.17018 0.844408 0.836337 0.720658 0.246284 -0.19222

Observatio n
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Predicted price with '93 Residual as Index = 100 s
-6.30123 4.256267 14.81377 25.37126 35.92876 46.48626 57.04376 67.60126 78.15876 88.71626 99.27375 109.8313 120.3888 130.9463 141.5037 152.0612 162.6187 173.1762 183.7337 194.2912 204.8487 215.4062 225.9637 236.5212 247.0787 257.6362 268.1937 278.7512 37.70123 30.74373 23.08623 13.82874 7.971237 1.713738 -4.64376 -12.1013 -19.1588 -25.6163 -29.2738 -31.6313 -20.3888 -17.3463 -13.7037 -18.5612 -10.8187 -15.9762 -14.8337 5.708758 19.95126 22.59376 22.83626 16.47876 16.32126 14.06377 4.806267 -3.75123

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009

26

Gross National Product
SUMMAR Y OUTPUT Regression Statistics Multiple R 0.957543 R Square 0.916889 Adjusted R Square 0.913692 Standard Error 379752.6 Observations 28

y

ANOVA df
Regression Residual Total 1 26 27

SS
4.14E+13 3.75E+12 4.51E+13

MS
4.14E+13 1.44E+11

F
286.833 9

Significan ce F
1.46E-15

Coefficien ts
Intercept year -3E+08 150468.9

Standar d Error
1772022 1 8884.47

t Stat
-16.8549 16.93617

Pvalue
1.63E15 1.46E15

Lower 95%
-3.4E+08 132206.6

Upper 95%
2.6E+08 168731. 2

Lower 95.0%
3.4E+08 132206. 6

Upper 95.0%
2.6E+08 168731. 2

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009

27

RESIDUAL OUTPUT
Observati on 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Predicted Gross National product -593150 -442681 -292212 -141743 8725.429 159194.3 309663.2 460132.1 610601 761069.9 911538.8 1062008 1212477 1362946 1513414 1663883 1814352 1964821 2115290 2265759 2416228 2566697 2717166 2867634 3018103 3168572 3319041 3469510 Standard Residuals 1.755649 1.372964 0.99848 0.612597 0.244599 -0.11105 -0.30283 -0.35456 -0.40629 -0.45803 -0.50976 -0.5615 -0.61323 -0.66496 -0.7167 -0.76843 -0.82017 -0.8719 -0.92363 -0.97537 -0.90854 -0.864 -0.5293 -0.03302 0.621087 1.275191 1.929294 2.583397

Residuals 654249.2 511640.3 372087.4 228286.5 91150.57 -41382.3 -112849 -132128 -151407 -170686 -189965 -209244 -228523 -247802 -267080 -286359 -305638 -324917 -344196 -363475 -338570 -321972 -197245 -12303.5 231450.6 475204.7 718958.8 962712.9

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009

28

Trend Analysis: data
demand of electricity in north india in APRIL in year MW 2004 22097 2005 25063 2006 27512 2007 29284 2008 30864 Intercept -4337089 X Variable 1 2175.5

demand of electricity in north forecasted value india in APRIL in MW regression value 22097 22613 25063 24788.5 27512 26964 29284 29139.5 30864 31315 AVAERAGE ACTUAL/FORECASTED

using actual/forecasted 0.977181267 1.011073683 1.020323394 1.004958905 0.985597956 OF 0.999827041

DEMAND IN 2009 33490.5 DEMAND IN 2009 AFTER SEASONAL ADJUST 33484.71 DEMAND IN 2010 35666 DEMAND IN 2010 AFTER SEASONAL ADJUST 35659.83 DEMAND IN 2011 37841.5 DEMAND IN 2011 AFTER SEASONAL ADJUST 37834.95

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009 demand of electricity in north india in JULY in MW 26808 27661 31516 33412 35393

29

year 2004 2005 2006 2007 2008

demand of electricity in north forecasted value using india in JULY in MW regression value actual/forecasted 26808 26373.8 1.016463308 27661 28665.9 0.964944411 31516 30958 1.01802442 33412 33250.1 1.004869158 35393 35542.2 0.995802173 AVAERAGE OF ACTUAL/FORECASTED 1.000020694 Intercept -4566994.6 X Variable 1 2292.1

DEMAND IN 2009 37834.3 DEMAND IN 2009 AFTER SEASONAL ADJUST 37835.08 DEMAND IN 2010 40126.4 DEMAND IN 2010 AFTER SEASONAL ADJUST 40127.23 DEMAND IN 2011 42418.5 DEMAND IN 2011 AFTER SEASONAL ADJUST 42419.38

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009 demand of electricity OCTOBERin MW 24049 27608 30290 29795 32565 in north india in

30

year 2004 2005 2006 2007 2008

demand of electricity in north india in OCTOBERin MW 24049 27608 30290 29795 32565

forecasted value regression value 25017.6 26939.5 28861.4 30783.3 32705.2 AVAERAGE ACTUAL/FORECASTED

using actual/forecasted 0.961283257 1.024814863 1.049498638 0.96789493 0.99571322 OF 0.999840982

Intercept X Variable 1

-3826470 1921.9

DEMAND IN 2009 34627.1 DEMAND IN 2009 AFTER SEASONAL ADJUST 34621.59 DEMAND IN 2010 36549 DEMAND IN 2010 AFTER SEASONAL ADJUST 36543.19 DEMAND IN 2011 38470.9 DEMAND IN 2011 AFTER SEASONAL ADJUST 38464.78

FORE School of Management – FMG XVIII A – Trimester 1

Managerial Economics Final Project Report September 2009

31

year 2004 2005 2006 2007 2008

demand of electricity JANUARY in MW 24997 27095 29173 31848 33169

in north india in

demand of electricity in north india in JANUARY in forecasted value using regression MW value 24997 25037 27095 27146.7 29173 29256.4 31848 31366.1 33169 33475.8 AVAERAGE OF ACTUAL/FORECASTED Intercept -4202801.8 X Variable 1 2109.7

actual/forecasted 0.998402365 0.998095533 0.997149342 1.015363721 0.99083517 0.999969226

DEMAND IN 2009 35585.5 DEMAND IN 2009 AFTER SEASONAL ADJUST 35584.4 DEMAND IN 2010 37695.2 DEMAND IN 2010 AFTER SEASONAL ADJUST 37694.04 DEMAND IN 2011 39804.9 DEMAND IN 2011 AFTER SEASONAL ADJUST 39803.68

TOTAL ELECTRICITY CONSUMPTION FROM 1950-51 TO 2006-07

FORE School of Management – FMG XVIII A – Trimester 1

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