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Divisia decomposition method and its application to changes of net oil import intensity


  • Hua Liao
  • Zhao-Yi
  • Ce Wang


The existing oil import dependence index cannot exactly measure the economic cost or scales, and it is difficult to describe the economical aspect of oil security. To measure the foreign dependence of one country's economy and reflect its oil economic security, this paper defines the net oil import intensity as the ratio of net import cost to GDP. By using Divisia Index Decomposition, the change of net oil import intensity in five industrialized countries and five newly industrialized countries during 1971¡ª2010 is decomposed into five factors: oil price, oil intensity, oil self-sufficiency, domestic price level and exchange rate. The result shows that the dominating factors are oil price and oil intensity; moreover, the newly industrialized countries have higher net oil import intensity than industrialized countries.

Suggested Citation

  • Hua Liao & Zhao-Yi & Ce Wang, 2013. "Divisia decomposition method and its application to changes of net oil import intensity," CEEP-BIT Working Papers 55, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.
  • Handle: RePEc:biw:wpaper:55

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    References listed on IDEAS

    1. Gupta, Eshita, 2008. "Oil vulnerability index of oil-importing countries," Energy Policy, Elsevier, vol. 36(3), pages 1195-1211, March.
    2. Rigoberto Ariel Yépez-Garcia & Julie Dana, 2012. "Mitigating Vulnerability to High and Volatile Oil Prices : Power Sector Experience in Latin America and the Caribbean," World Bank Publications, The World Bank, number 9341.
    3. Hua Liao, . "China Country Report," Chapters, in: Shigeru Kimura (ed.),Analysis on Energy Saving Potential in East Asia, chapter 5, pages 115-130, Economic Research Institute for ASEAN and East Asia (ERIA).
    4. Helen Cabalu & Chassty Manuhutu, 2009. "Vulnerability of Natural Gas Supply in the Asian Gas Market," Economic Analysis and Policy, Elsevier, vol. 39(2), pages 255-270, September.
    5. Hua Liao & Ce Wang & Zhi-Shuang Zhu & Xiao-Wei Ma, 2012. "Structural decomposition analysis on energy intensity changes at regional level," CEEP-BIT Working Papers 40, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.
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    More about this item


    net oil import intensity; Divisia index; decomposition method;

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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