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Are shocks to natural gas consumption temporary or permanent? Evidence from a panel of U.S. states

  • Apergis, Nicholas
  • Loomis, David
  • Payne, James E.

This short communication examines whether or not U.S. natural gas consumption follows a stationary process. Unlike previous research that has focused on regional country or industrial sector-based panel studies, this study undertakes a sub-national investigation of natural gas consumption for the 50 U.S. states. Levin et al. (2002), Im et al. (2003), Maddala and Wu (1999), and Hadri (2000) panel unit root and stationarity tests reveal that natural gas consumption is integrated of order one. However, once allowance is made for endogenously determined structural breaks, the Carrion-i-Silvestre et al. (2005), Im et al. (2005), and Westerlund (2005) panel unit root and stationarity tests indicate that natural gas consumption is integrated of order zero. Discussion of the structural breaks is briefly surveyed in relation to the natural gas industry's response to legislative actions.

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Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 38 (2010)
Issue (Month): 8 (August)
Pages: 4734-4736

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Handle: RePEc:eee:enepol:v:38:y:2010:i:8:p:4734-4736
Contact details of provider: Web page: http://www.elsevier.com/locate/enpol

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  1. Mishra, Vinod & Sharma, Susan & Smyth, Russell, 2009. "Are fluctuations in energy consumption per capita transitory? Evidence from a panel of Pacific Island countries," Energy Policy, Elsevier, vol. 37(6), pages 2318-2326, June.
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  3. Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I.
  4. Perron, P, 1988. "The Great Crash, The Oil Price Shock And The Unit Root Hypothesis," Papers 338, Princeton, Department of Economics - Econometric Research Program.
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  6. Kaddour Hadri, 1999. "Testing For Stationarity In Heterogeneous Panel Data," Research Papers 1999_04, University of Liverpool Management School.
  7. Paresh Kumar Narayan & Russell Smyth, 2005. "Are Shocks To Energy Consumption Permanent Or Temporary? Evidence From 182 Countries," Monash Economics Working Papers 06/05, Monash University, Department of Economics.
  8. James E. Payne, 2010. "Survey of the international evidence on the causal relationship between energy consumption and growth," Journal of Economic Studies, Emerald Group Publishing, vol. 37(1), pages 53-95, January.
  9. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
  10. Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
  11. Kyung-So Im & Junsoo Lee & Margie Tieslau, 2005. "Panel LM Unit-root Tests with Level Shifts," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(3), pages 393-419, 06.
  12. Hsu, Yi-Chung & Lee, Chien-Chiang & Lee, Chi-Chuan, 2008. "Revisited: Are shocks to energy consumption permanent or temporary? New evidence from a panel SURADF approach," Energy Economics, Elsevier, vol. 30(5), pages 2314-2330, September.
  13. Josep Lluis Carrion Silvestre & Tomas del Barrio Castro & Enrique Lopez Bazo, 2003. "Breaking the panels. An application to the GDP per capita," Working Papers in Economics 97, Universitat de Barcelona. Espai de Recerca en Economia.
  14. Amsler, Christine & Lee, Junsoo, 1995. "An LM Test for a Unit Root in the Presence of a Structural Change," Econometric Theory, Cambridge University Press, vol. 11(02), pages 359-368, February.
  15. Payne, James E., 2010. "A survey of the electricity consumption-growth literature," Applied Energy, Elsevier, vol. 87(3), pages 723-731, March.
  16. Lean, Hooi Hooi & Smyth, Russell, 2009. "Long memory in US disaggregated petroleum consumption: Evidence from univariate and multivariate LM tests for fractional integration," Energy Policy, Elsevier, vol. 37(8), pages 3205-3211, August.
  17. Kumar Narayan, Paresh & Narayan, Seema & Popp, Stephan, 2010. "Energy consumption at the state level: The unit root null hypothesis from Australia," Applied Energy, Elsevier, vol. 87(6), pages 1953-1962, June.
  18. Schmidt, Peter & Phillips, C B Peter, 1992. "LM Tests for a Unit Root in the Presence of Deterministic Trends," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 257-87, August.
  19. Chen, Pei-Fen & Lee, Chien-Chiang, 2007. "Is energy consumption per capita broken stationary? New evidence from regional-based panels," Energy Policy, Elsevier, vol. 35(6), pages 3526-3540, June.
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