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Asymmetric Effects of Crude Oil Prices on Demand for Oil in Selected OPEC Countries Using Price Decomposition and Dynamic Panel Methods
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Vida Varahami *   1, Mahsan Sadeghi2 |
1- shahid beheshti , vida.varahrami@gmail.com
2- shahid beheshti |
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Abstract: (4352 Views) |
In this paper we assess the hypothesis of irreversibility of price effects on crude oil demand in selected OPEC member countries. We do this by using panel data for the period 2003 to 2013 and applying a dynamic panel model. Our study results confirm the existence of an asymmetric relationship between oil prices and demand for oil in the selected countries (Iran, Saudi Arabia, Iraq, Kuwait). The estimated values for elasticity of demand with respect to maximum, increasing and decreasing prices are 4.376519, 0.08469 and 0.054713 in the short run and 19.65, 0.38 and 0.245 for the long run. Short run and long run income elasticity of oil demand are respectively 0.30, 1.38.
JEL Classification: E52
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| Keywords: Price Decomposition, Dynamic Panel Model, Irreversibility of Oil Demand, Asymmetric Effects. |
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Full-Text [PDF 307 kb]
(1401 Downloads)
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Type of Study: Research |
Subject:
Energy Economic
Received: 2016/07/7 | Accepted: 2017/02/26 | Published: 2017/06/24 | ePublished: 2017/06/24
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