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Can household energy efficiency dampen crude oil price volatility in the United States?

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Listed:
  • Ojonugwa Usman
  • Oktay Ozkan
  • Chinazaekpere Nwani
  • Festus Victor Bekun
  • Andrew Adewale Alola

Abstract

Even though the effect of oil price shocks on macroeconomics has been extensively investigated, the literature on how efficiency in household energy use affect crude oil price volatility is yet explored. This study unveils whether household energy efficiency lower crude oil price volatility asymmetrically in the United States using the historical and forecast dataset that spans from 1970:Q1-2040:Q1. Applying the multivariate case of Quantile-on-Quantile Regression, the empirical results show that household energy efficiency dampens crude oil price volatility with a stronger connection in quantiles before the median quantiles of crude oil price volatility. However, the effect of household energy efficiency decreases with an increase across quantiles of the crude oil price volatility. The results further show that energy-related CO2 emissions and retail electricity price intensify crude oil price volatility with varying effects across quantiles. These findings are similar to the sensitivity analysis and robustness checks. Overall, the policy implication of our findings is that government and policymakers need to demonstrate unequivocal commitments to improving not only energy-efficient practices at household level but also to mitigate energy-related environmental disasters.

Suggested Citation

  • Ojonugwa Usman & Oktay Ozkan & Chinazaekpere Nwani & Festus Victor Bekun & Andrew Adewale Alola, 2025. "Can household energy efficiency dampen crude oil price volatility in the United States?," PLOS ONE, Public Library of Science, vol. 20(1), pages 1-19, January.
    • Handle: RePEc:plo:pone00:0307840
    DOI: 10.1371/journal.pone.0307840
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    References listed on IDEAS

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    1. Xiuzhen, Xie & Zheng, Wenxiu & Umair, Muhammad, 2022. "Testing the fluctuations of oil resource price volatility: A hurdle for economic recovery," Resources Policy, Elsevier, vol. 79(C).
    2. Alola, Andrew Adewale & Özkan, Oktay & Usman, Ojonugwa, 2023. "Examining crude oil price outlook amidst substitute energy price and household energy expenditure in the USA: A novel nonparametric multivariate QQR approach," Energy Economics, Elsevier, vol. 120(C).
    3. Zhao, Jing, 2022. "Exploring the influence of the main factors on the crude oil price volatility: An analysis based on GARCH-MIDAS model with Lasso approach," Resources Policy, Elsevier, vol. 79(C).
    4. Kang, Boda & Nikitopoulos, Christina Sklibosios & Prokopczuk, Marcel, 2020. "Economic determinants of oil futures volatility: A term structure perspective," Energy Economics, Elsevier, vol. 88(C).
    5. Zhang, Yonggang & Hyder, Mansoor & Baloch, Zulfiqar Ali & Qian, Chong & Berk Saydaliev, Hayot, 2022. "Nexus between oil price volatility and inflation: Mediating nexus from exchange rate," Resources Policy, Elsevier, vol. 79(C).
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