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Exploring the Effects of Oil and Gas Prices on Industrial Production in Colombia: A Quantile Regression Analysis

Author

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  • Juan Manuel Candelo-Viafara

    (PhD in Management, Universidad del Valle, Colombia,)

  • Andres Oviedo-Gomez

    (PhD Candidate in Engineering, Universidad del Valle, Colombia,)

  • Maria Del Pilar Rivera-Diaz

    (Master’s in occupational risk Prevention, University of Málaga, Spain.)

Abstract

This study examines the impact of oil and gas prices on industrial production in Colombia between 1997 and 2022 using the quantile regression methodology (QR) to evaluate seasonality and nonlinear effects on the distribution of the industrial sector, the findings indicate that when industrial production is at low levels, fluctuations in gas prices have minimal impact. Conversely, when industrial production is at medium levels, gas prices have a significant negative impact, while at high levels (above the sixth decile), gas prices have a negative but not significant impact. On the other hand, oil prices generate positive and significant impacts at medium and high production levels. The study concludes that increasing gas production in the country would lead to a reduction in its price, decrease costs, and increase national production, additionally, gas production can be a viable element in energy transition, as it strengthens sectors of the economy other than oil.

Suggested Citation

  • Juan Manuel Candelo-Viafara & Andres Oviedo-Gomez & Maria Del Pilar Rivera-Diaz, 2023. "Exploring the Effects of Oil and Gas Prices on Industrial Production in Colombia: A Quantile Regression Analysis," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 364-369, November.
    • Handle: RePEc:eco:journ2:2023-06-38
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Oil Prices; Gas Prices; Industrial Production; GDP; Energy; Quantile Regression;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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