Are fluctuations in oil consumption permanent or transitory? Evidence from linear and nonlinear unit root tests

Solarin, Sakiru Adebola

doi:10.1016/j.enpol.2015.10.034

Cited by 23 publications

(8 citation statements)

References 41 publications

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“…Apergis and Payne (2010) assessed the stationarity of oil consumption in the United States spanning the period 1960 to 2007 with the unit root tests of Lee and Strazicich (2003) and and found that oil consumption is stationary for a majority of states. Solarin and Lean (2016) probed the stationary properties of oil consumption in 57 countries for the period 1965-2012 and the study concluded that oil consumption is non-stationary in 38 countries while it is stationary in 19 countries. Burakov (2019) investigated the stationary process of oil consumption in 15 countries for the period 1990 to 2017 using the panel LM unit root test and concluded that oil consumption is stationary in the observed country.…”

Section: Literature Reviewmentioning

confidence: 99%

Are fluctuations in coal, oil and natural gas consumption permanent or transitory? Evidence from OECD countries

Destek

Sarkodıe

2020

Heliyon

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Economic development is characterised by natural resource extraction and consumption. However, due to the finite nature of fossil fuel energy sources and its price shocks, an investigation into its historical fluctuations is essential for energy policy formulation. Against the backdrop, this paper examines the stationary properties of coal, oil and natural gas consumption per capita of 16 Organisation for Economic Cooperation and Development (OECD) countries for the period 1970-2018. The study employs Fourier ADF and Fourier KSS unit root tests for linear and nonlinear series to assess the permanent or transitory shocks in coal, oil, and natural gas consumption. Empirical findings show that coal consumption is stationary for 6 of 16 countries. In contrast, oil consumption is found stationary for 4 of 16 countries while natural gas consumption is found stationary for 5 of 16 countries. These results demonstrate that any shock in oil, coal, and natural gas consumption will be permanent in most of the OECD countries. Thus, finding fossil fuel alternatives like renewable energy sources which are localized rather than internationally tradable, lessens the reliance on fossil fuel imports and the negative impacts of price shocks.

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Section: Literature Reviewmentioning

confidence: 99%

Are fluctuations in coal, oil and natural gas consumption permanent or transitory? Evidence from OECD countries

Destek

Sarkodıe

2020

Heliyon

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“…Applying unit root tests, with endogenously determined structural breaks, the null hypothesis of a unit root in petroleum consumption was rejected for most of the states [13,21]. Solarin and Lean (2016) [2] examined the nonlinear stationarity properties of oil (petroleum) consumption for 57 countries over a 50-year period. They found that the consumption in two thirds of the countries contained a unit root, while the consumption in one third of the countries was stationary.…”

Section: -Literature Reviewmentioning

confidence: 99%

“…Nonetheless, the impact of these measures and policies could be transitory or permanent depending on whether oil consumption is a unit root process or not (i.e., stationary process). In view of this, it is important to employ unit root tests to determine which impact is likely to occur [2]. Admittedly, some research has investigated the stationarity of a number of energy variables in Jordan, being a country within panels of other countries [3,4].…”

Section: -Introductionmentioning

confidence: 99%

Are Shocks to Petroleum Products Consumption Permanent or Temporary: A New Evidence from LM Unit Root Tests with Structural Breaks

2021

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The purpose of this paper is to examine whether shocks to the consumption of petroleum products in Jordan have permanent or temporary effects. This has been accomplished by applying Lee and Strazicich (2003) test of unit root with structural breaks to investigate the stationarity properties related to the time series of petroleum products consumption over the period 1961 to 2019. Empirical findings lend evidence that the consumption of petroleum products is a unit root process, implying that shocks to petroleum products consumption has permanent impact, and this consumption does not turn back to its time trend path following a shock. This indicates that there are high possibilities of energy demand management and conservation policies targeted towards achieving the intended goals in the long-run. In fact, this is compatible with the government energy strategies aimed at reducing the consumption of fossil oils. Doi: 10.28991/esj-2021-01279 Full Text: PDF

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“…Besides, energy consumption per capita exhibits some sharp and smooth structural shifts (breaks) in its mean and/or trend levels, and the endogenously identified break dates correspond to specific macroeconomic events such as oil crises, Gulf War, Asian and global financial crises. Solarin and Lean () examined the integration properties of the total oil consumption in 57 countries for the 1965–2012 years. According to their findings, the oil consumption series in 21 countries follow a nonlinear path while those in the other countries are linear in nature.…”

Section: Empirical Literaturementioning

confidence: 99%

“…To the best of our knowledge, this is the first paper to test for natural gas consumption series properties, by accounting for smooth and sharp breaks. However, existing studies like Kum (), Bolat et al (), Shahbaz et al (), Ozcan and Ozturk (), and Solarin and Lean () only consider sharp breaks. By allowing multiple breaks in the series, we can capture as many breaks as possible.…”

Section: Introductionmentioning

confidence: 99%

Are shocks to natural gas consumption transitory or permanent? A more powerful panel unit root test on the G7 countries

Cai

Magazzino

2019

Natural Resources Forum

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This article re‐examines the persistence in natural gas consumption using an alternative methodology. We compare the results of traditional panel unit root tests with those provided by Bahmani‐Oskooee et al., which allow for both sharp and smooth breaks. Our analysis uses data for the G7 countries over the 1965–2016 years. The empirical findings show that while traditional unit root tests with sharp breaks lean towards the non‐stationarity of the series for all the G7 countries, modeling breaks in our unit root testing methodology can assert that natural gas consumption is non‐stationary only for Canada, France, Italy, and USA. These results imply that, for the majority of our sample, energy demand management policies designed to shrink energy consumption will have temporary effects, as energy consumption will return to its trend path.

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Are fluctuations in oil consumption permanent or transitory? Evidence from linear and nonlinear unit root tests

Cited by 23 publications

References 41 publications

Are fluctuations in coal, oil and natural gas consumption permanent or transitory? Evidence from OECD countries

Are fluctuations in coal, oil and natural gas consumption permanent or transitory? Evidence from OECD countries

Are Shocks to Petroleum Products Consumption Permanent or Temporary: A New Evidence from LM Unit Root Tests with Structural Breaks

Are shocks to natural gas consumption transitory or permanent? A more powerful panel unit root test on the G7 countries

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