U.S. petroleum consumption behavior and oil price uncertainty: Tests of cointegration and parameter instability

Arize, Augustine C.

doi:10.1007/bf02298398

Cited by 8 publications

(4 citation statements)

References 25 publications

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“…Arize (2000) used cointegration theory to characterize US petroleum consumption behaviour. The estimated model, which included petroleum consumption, real income and relative prices, supported the presence of cointegration relationship.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Other factors that can influence oil demand are relative price, lifestyle decision and structure of economy (Howard et al ., 1993). Moreover, based on empirical literature of Jones (1993) and Arize (2000), and theoretical rationale provided earlier, petroleum consumption may be a function of oil price uncertainty as well. Thus, a given demand function for oil can be a function of real GDP, real price of oil and oil price uncertainty, which can be written mathematically as follows: …”

Section: Model Specificationmentioning

confidence: 99%

“…Several similar studies have been carried out to estimate the consumption function in different countries and for various data sets, including Cooper (2003), Dees et al (2007), Altinay (2007) and Narayan and Smyth (2007). Arize (2000) used cointegration theory to characterize US petroleum consumption behaviour. The estimated model, which included petroleum consumption, real income and relative prices, supported the presence of cointegration relationship.…”

Section: Literature Reviewmentioning

confidence: 99%

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Petroleum consumption—oil price uncertainty nexus in OECD countries: application of EGARCH models and panel cointegration

Pourshahabi¹,

Sattari

Shirazi³

2012

OPEC Energy Review

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This paper investigates the effects of oil price uncertainty on petroleum consumption in Organization for Economic Cooperation and Development (OECD) countries. We apply panel unit roots and panel cointegration methods to detect long‐run relationships. Moreover, exponential generalized autoregressive conditional heteroscedasticity models are used to capture the stochastic variation and asymmetries in oil prices by using monthly oil prices data from 1980 to 2008. The result indicates that the coefficients of real oil price and income variables are significant and of expected sign. Furthermore, our empirical results indicate that the effect of oil price uncertainty on petroleum consumption of OECD countries is negative and significant. That is, oil price uncertainty reduces petroleum consumption in OECD countries. Following these results, this paper offers some important and common ways to cope with costs of oil price volatility such as reducing oil price volatility itself, take advantage of hedging, price smoothing, broaden the diversity of energy sources and diminishing the importance of oil consumption.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Model Specificationmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

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Petroleum consumption—oil price uncertainty nexus in OECD countries: application of EGARCH models and panel cointegration

Pourshahabi¹,

Sattari

Shirazi³

2012

OPEC Energy Review

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“…Within this price inelastic environment, individual suppliers experience highly elastic demand (Arize 2000, Bulow and Shapiro 2003, and Ye et al, 2003. This follows because a single seller of crude oil or products can quickly sell his/ her total sales volume by reducing the offering price to a level slightly below the current market price.…”

Section: Oil Markets and Pipelinesmentioning

confidence: 99%

Oil Pipeline Markets and Operations

Hull¹

2010

J Transp Res Forum

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Despite considerable literature regarding other modes of transportation, little is written about oil pipelines. This is remarkable given that oil pipelines move 17% of all intercity ton miles, but also understandable because they have a low public profile and, with near total automation, have few employees. This article attempts to bridge the gap by comparing pipeline operations and those of the other modes, showing striking similarities along with a few significant differences. It also portrays pipeline markets and their changing trends. In recent years, oil pipelines have served an industry that is experiencing rapidly shifting geographical markets, proliferation of new products, and outsourcing of transportation by shippers. The pipeline industry has responded to these challenges with increased competitive entry, numerous capital construction projects, and a high reliance on technology. These issues, along with the regulatory constraints and responses are portrayed.

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