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Oil Price and Slumps Effects on Personal Consumption in Saudi Arabia

Author

Listed:
  • Haider Mahmood

    (Department of Finance, College of Business Administration, Prince Sattam bin Abdulaziz University, 165 Al-Kharj 11942, Saudi Arabia,)

  • Ahmad M.A. Zamil

    (Department of Marketing, College of Business Administration, Prince Sattam bin Abdulaziz University, 165 Al-Kharj 11942, Saudi Arabia)

Abstract

Oil price movements and its macroeconomic effect may have deep effects on the oil exporting economy like Saudi Arabia in terms of personal consumption and welfare derived from the consumption. This present research targets to isolate the relationship between oil price and personal consumption per capita using a period 1970-2016 and applying cointegration technique. We find that all variables are the first different stationary and long and short run relationships are also corroborated. We find the positive relationship between oil price and personal consumption per capita in both long and short runs which suggest that oil price has direct effect on the consumption of the Kingdom in case of any movement. Moreover, we find that the oil price crises have insignificant effects on the personal consumption per capita hence the economy s consumption is supported by non-oil sector in the slump periods. Based on findings, we suggest the diversification policy to the Saudi economy for a smooth consumption pattern in the long run.

Suggested Citation

  • Haider Mahmood & Ahmad M.A. Zamil, 2019. "Oil Price and Slumps Effects on Personal Consumption in Saudi Arabia," International Journal of Energy Economics and Policy, Econjournals, vol. 9(4), pages 12-15.
    • Handle: RePEc:eco:journ2:2019-04-2
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    References listed on IDEAS

    as
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    9. Luiggi Donayre & Neil A. Wilmot, 2016. "The Asymmetric Effects of Oil Price Shocks on the Canadian Economy," International Journal of Energy Economics and Policy, Econjournals, vol. 6(2), pages 167-182.
    10. Haider Mahmood & Tarek Tawfik Yousef Alkhateeb, 2017. "Trade and Environment Nexus in Saudi Arabia: An Environmental Kuznets Curve Hypothesis," International Journal of Energy Economics and Policy, Econjournals, vol. 7(5), pages 291-295.
    11. Haider Mahmood & Tarek Tawfik Yousef Alkhateeb, 2018. "Foreign Direct Investment, Domestic Investment and Oil Price Nexus in Saudi Arabia," International Journal of Energy Economics and Policy, Econjournals, vol. 8(4), pages 147-151.
    12. Abdulaziz Hamad Algaeed, 2017. "The Impacts of Non-linear Oil Price Shocks on Saudi Savinginvestment Behavior: An Empirical Investigation," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 155-165.
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    Cited by:

    1. Mahmood, Haider & Chaudhary, A. R., 2013. "Impact of FDI on Income Inequality in Pakistan," MPRA Paper 109460, University Library of Munich, Germany.
    2. Ahmad, Abdul-Rahim & Tasadduq, Imran A. & Imam, Muhammad Hasan & Al-Ahmadi, Mohammad Saad & Ahmad, Muhammad Bilal & Tanveer, Muhammad & Mahmood, Haider, 2021. "Intelligent Decision Support in Automating ABET Accreditation Processes: A Conceptual Framework," MPRA Paper 109151, University Library of Munich, Germany.
    3. Tanveer, Muhammad & Hassan, Shafiqul & Mahmood, Haider & Khan, Syed Abdul Rehman, 2021. "The Use of Social Media by Managers During the Pandemic to Accomplish the Tasks," MPRA Paper 109249, University Library of Munich, Germany.
    4. Aziz, Ghazala & Sarwar, Suleman, 2023. "Revisit the role of governance indicators to achieve sustainable economic growth of Saudi Arabia – pre and post implementation of 2030 Vision," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 213-227.
    5. Mahmood, Haider & Tanveer, Muhamamd & Ahmad, Abdul-Rahim & Furqan, Maham, 2021. "Rule of Law and Control of Corruption in Managing CO2 Emissions Issue in Pakistan," MPRA Paper 109250, University Library of Munich, Germany.
    6. Haider Mahmood, 2021. "Oil Price and Industrial Growth in Saudi Arabia: Sectoral and Asymmetry Analyses," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 7-13.
    7. Tarek Tawfik Yousef Alkhateeb & Haider Mahmood, 2020. "The Oil Price and Trade Nexus in the Gulf Co-Operation Council Countries," Resources, MDPI, vol. 9(12), pages 1-19, November.
    8. Tarek Tawfik Yousef Alkhateeb & Haider Mahmood, 2020. "Oil Price and Energy Depletion Nexus in GCC Countries: Asymmetry Analyses," Energies, MDPI, vol. 13(12), pages 1-13, June.
    9. Rabiu Maijama’a & Kabiru Saidu Musa, 2020. "Crude Oil Price, Urbanization and Environmental Pollution in Nigeria: Evidence from ARDL Approach," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 8(4), pages 227-240, December.
    10. Ponle Henry Kareem & Mumtaz Ali & Turgut Tursoy & Wagdi Khalifa, 2023. "Testing the Effect of Oil Prices, Ecological Footprint, Banking Sector Development and Economic Growth on Energy Consumptions: Evidence from Bootstrap ARDL Approach," Energies, MDPI, vol. 16(8), pages 1-19, April.
    11. Mahmood, Haider, 2020. "Impact of financial market development on the CO2 Emissions in GCC countries," MPRA Paper 109134, University Library of Munich, Germany.
    12. Al-Qahtani, Maleeha Mohammed Zaaf & Alkhateeb, Tarek Tawfik Yousef & Mahmood, Haider & Abdalla, Manal Abdalla Zahed & Mawad, Ghada Shihata Ebrahim & Alkhatib, Maha Ahmed Hussein, 2020. "Exploring the Level of Managerial, Political, Academic, Economic and Social Women Empowerment in Saudi Arabia," MPRA Paper 109447, University Library of Munich, Germany.
    13. Haider Mahmood & Awad Ali Alanzi, 2020. "Rule of Law and Environment Nexus in Saudi Arabia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 7-12.
    14. Muhammad Tanveer & Harsandaldeep Kaur & George Thomas & Haider Mahmood & Mandakini Paruthi & Zhang Yu, 2021. "Mobile Phone Buying Decisions among Young Adults: An Empirical Study of Influencing Factors," Sustainability, MDPI, vol. 13(19), pages 1-18, September.
    15. Tarek Tawfik Yousef Alkhateeb & Haider Mahmood, 2020. "Oil Price and Capital Formation Nexus in GCC Countries: Asymmetry Analyses," International Journal of Energy Economics and Policy, Econjournals, vol. 10(6), pages 146-151.
    16. Tanveer, Muhammad & Mahmood, Haider & Haq, Ikram Ul & Rather, Raouf Ahmad & Ali, Haider, 2021. "Higher Education Quality Assurance Framework Pathway for Transformation in Pakistan: Managerial and Economic Perspectives," MPRA Paper 109253, University Library of Munich, Germany.
    17. Mahmood, Haider & Alkhateeb, Tarek Tawfik Yousef & Al-Qahtani, Maleeha Mohammed Zaaf & Allam, Zafrul Allam & Ahmad, Nawaz & Furqan, Maham, 2019. "Energy consumption, economic growth and pollution in Saudi Arabia," MPRA Paper 109143, University Library of Munich, Germany.
    18. Khalid Abdullah Alkhathlan & Tarek Tawfik Yousef Alkhateeb & Haider Mahmood & Wardah Abdulrahman Bindabel, 2020. "Determinants of Diversification from Oil Sector in Saudi Arabia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 384-391.
    19. Haider Mahmood & Tarek Tawfik Yousef Alkhateeb & Maleeha Mohammed Zaaf Al-Qahtani & Zafrul Allam & Nawaz Ahmad & Maham Furqan, 2020. "Urbanization, Oil Price and Pollution in Saudi Arabia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(2), pages 477-482.

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    More about this item

    Keywords

    Personal consumption per capita; Oil price; Oil price slumps; cointegration.;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management

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