Abstract
This paper presents a spatial kernel estimator that allows coefficients and market size to be estimated at the observation of interest. In economic terms, the bandwidth length of the spatial kernel estimator captures the size of the market incorporated in estimation at the location of interest, and this optimal size of the market included in regression minimizes mean square error (MSE).
Notes
The most common mechanism used by power plants to comply with emission caps is fuel switching to coal with lower sulfur content.
The 268 observations stem from the common denominator of coal-fired plants reported in the Electric Power Annual and the EPA's emissions and generation resource integrated database (E-GRID).