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OECD Oil Demand Dynamics: Trends and Asymmetries

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  • William W. Hogan

Abstract

Oil market data of the 1980s reject a simple, symmetric reduced-form model of dynamic oil demand in the OECD countries. Tests of price asymmetric long-run demand models produce ambiguous results. The pooled time series estimations find near unitary output elasticities, and reject linear demand models in favor of constant elasticity formulations. Despite large differences in product prices and crude prices, the data cannot reject use of a crude price model for aggregate oil demand. A reduced-form model symmetric in product prices but with technology trends for non-price oil conservation compares favorably with other formulations, and provides slightly lower projections of future oil demand intensity. However, even these lower econometric projections imply substantial increases in aggregate oil demand, increases which exceed those found in the conventional judgmental estimates.

Suggested Citation

  • William W. Hogan, 1993. "OECD Oil Demand Dynamics: Trends and Asymmetries," The Energy Journal, , vol. 14(1), pages 125-157, January.
    • Handle: RePEc:sae:enejou:v:14:y:1993:i:1:p:125-157
    DOI: 10.5547/ISSN0195-6574-EJ-Vol14-No1-6
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    References listed on IDEAS

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    1. Robert S. Pindyck, 1979. "The Structure of World Energy Demand," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262661772, December.
    2. James A. Kahn, 1986. "Gasoline Prices and the Used Automobile Market: A Rational Expectations Asset Price Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(2), pages 323-339.
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