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Oil prices and life satisfaction: asymmetries between oil exporting and oil importing countries

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  • Jeffrey B. Nugent
  • Malgorzata Switek

Abstract

In spite of general consensus on the importance of oil prices for objective measures of economic well-being across countries, almost no research has been carried out to analyse the effects of oil prices on subjective well-being internationally. Using the World Values Survey (2009), we help fill this gap by studying the effects of oil prices on life satisfaction for two groups of countries, oil importers and oil exporters. Although some previous studies have shown negative effects of oil prices on subjective well-being of one oil importing country the United States, since it is an outlier in terms of dependence on automobiles and in gasoline consumption per capita, these findings may not be representative of other oil importing countries. Our results show that, in fact, oil prices have quite strong negative effects on life satisfaction in a sample of over 40 oil importing countries. By contrast, for oil exporting countries for which there have been virtually no previous quantitative studies, but theoretical analyses suggest the results could be ambiguous, we find strong positive effects on life satisfaction. Hence, our results reveal quite strong asymmetries in the effects of oil prices on life satisfaction between oil importers and oil exporters.

Suggested Citation

  • Jeffrey B. Nugent & Malgorzata Switek, 2013. "Oil prices and life satisfaction: asymmetries between oil exporting and oil importing countries," Applied Economics, Taylor & Francis Journals, vol. 45(33), pages 4603-4628, November.
    • Handle: RePEc:taf:applec:v:45:y:2013:i:33:p:4603-4628
    DOI: 10.1080/00036846.2013.795281
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    1. Benes, Jaromir & Chauvet, Marcelle & Kamenik, Ondra & Kumhof, Michael & Laxton, Douglas & Mursula, Susanna & Selody, Jack, 2015. "The future of oil: Geology versus technology," International Journal of Forecasting, Elsevier, vol. 31(1), pages 207-221.
    2. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422.
    3. Rebeca Jimenez-Rodriguez & Marcelo Sanchez, 2005. "Oil price shocks and real GDP growth: empirical evidence for some OECD countries," Applied Economics, Taylor & Francis Journals, vol. 37(2), pages 201-228.
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    1. Jimenez Mori, Raul, 2021. "It’s not price; It’s quality. Satisfaction and price fairness perception," World Development, Elsevier, vol. 139(C).
    2. S Coleman & J C Cuestas & E Mourelle, 2016. "Investigating the oil price-exchange rate nexus: evidence from Africa 1970-2004," Economic Issues Journal Articles, Economic Issues, vol. 21(2), pages 53-79, September.

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