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Short- and long-run adjustments in U.S. petroleum consumption

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  • Huntington, Hillard G.

Abstract

Long-run adjustments in petroleum consumption are not only larger than short-run adjustments. They may also be motivated by entirely different price events. This analysis shows that new price peaks have both short-run and long-run consumption responses, a result that is starkly different than price changes that track previous price paths. It also establishes significant trend effects where gasoline and residual fuel oil consumption decline over time. The analysis explores these adjustments by establishing long-run cointegrating relationships for different petroleum product groupings. An important implication is that price increases above historical levels may be providing substantially greater incentives for significant long-run demand adjustments than would be the case otherwise.

Suggested Citation

  • Huntington, Hillard G., 2010. "Short- and long-run adjustments in U.S. petroleum consumption," Energy Economics, Elsevier, vol. 32(1), pages 63-72, January.
  • Handle: RePEc:eee:eneeco:v:32:y:2010:i:1:p:63-72
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    Cited by:

    1. Song, Nianfu & Aguilar, Francisco X. & Shifley, Stephen R. & Goerndt, Michael E., 2012. "Analysis of U.S. residential wood energy consumption: 1967–2009," Energy Economics, Elsevier, vol. 34(6), pages 2116-2124.
    2. Hunt, Lester C. & Ryan, David L., 2015. "Economic modelling of energy services: Rectifying misspecified energy demand functions," Energy Economics, Elsevier, vol. 50(C), pages 273-285.
    3. Luis Miguel Galindo & Jimy Ferrer Carbonell & José Eduardo Alatorre & Orlando Reyes, 2015. " Metaanálisis de las elasticidades ingreso y precio de la demanda de energía: algunas implicaciones de politica pública para América Latina," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 38(75), pages 9-40.
    4. Adeyemi, Olutomi I. & Hunt, Lester C., 2014. "Accounting for asymmetric price responses and underlying energy demand trends in OECD industrial energy demand," Energy Economics, Elsevier, vol. 45(C), pages 435-444.
    5. Leng Wong, Siang & Chia, Wai-Mun & Chang, Youngho, 2013. "Energy consumption and energy R&D in OECD: Perspectives from oil prices and economic growth," Energy Policy, Elsevier, vol. 62(C), pages 1581-1590.
    6. Mensah, Justice Tei & Marbuah, George & Amoah, Anthony, 2016. "Energy demand in Ghana: A disaggregated analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 924-935.
    7. Goerlich, Roland & Wirl, Franz, 2012. "Interdependencies between transport fuel demand, efficiency and quality: An application to Austria," Energy Policy, Elsevier, vol. 41(C), pages 47-58.
    8. Galindo, Luis Miguel & Samaniego, Joseluis & Ferrer, Jimy & Alatorre, José Eduardo & Reyes, Orlando, 2016. "Cambio climático, políticas públicas y demanda de energía y gasolinas en América Latina: un meta-análisis," Documentos de Proyectos 718, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    9. Lee, Chien-Chiang & Chiu, Yi-Bin, 2013. "Modeling OECD energy demand: An international panel smooth transition error-correction model," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 372-383.
    10. repec:eee:transa:v:103:y:2017:i:c:p:154-171 is not listed on IDEAS
    11. Huntington, Hillard G., 2011. "Backcasting U.S. oil demand over a turbulent decade," Energy Policy, Elsevier, vol. 39(9), pages 5674-5680, September.

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