Dynamic OLS estimation of the U.S. import demand for Mexican crude oil
This paper estimates the U.S. import demand for crude oil from Mexico. The analysis is based on time series from January 1990 to December 2010. Time series properties of the processes that generate the data are assessed in order to specify the order of integration for each series. According to results from unit root tests, all the series under study are unit root non-stationary. The paper then estimates the cointegrating import demand regression using Dynamic OLS procedure. Residuals from the DOLS cointegrating regression are tested and found to be stationary; thus, the cointegrating regression is not spurious. According to estimation results, U.S. import demand for Mexican crude oil is income inelastic, perfect price inelastic, and responsive to changes in both U.S. stock of oil (excluding SPR) and unemployment rate in the U.S. Also, this paper points to the estimate bias from omitting relevant variables as it is common in the mainstream literature on crude oil import demand.
|Date of creation:||Mar 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Melo, Oscar & Vogt, Michael G., 1984. "Determinants of the demand for imports of Venezuela," Journal of Development Economics, Elsevier, vol. 14(3), pages 351-358, April.
- Frank W. Agbola & Maylene Y. Damoense, 2005. "Time-series estimation of import demand functions for pulses in India," Journal of Economic Studies, Emerald Group Publishing, vol. 32(2), pages 146-157, May.
- Peter C.B. Phillips, 1985.
"Time Series Regression with a Unit Root,"
Cowles Foundation Discussion Papers
740R, Cowles Foundation for Research in Economics, Yale University, revised Feb 1986.
- Xingjun Zhao & Yanrui Wu, 2007.
"Determinants of China’s Energy Imports: An Empirical Analysis,"
Economics Discussion / Working Papers
07-03, The University of Western Australia, Department of Economics.
- Zhao, Xingjun & Wu, Yanrui, 2007. "Determinants of China's energy imports: An empirical analysis," Energy Policy, Elsevier, vol. 35(8), pages 4235-4246, August.
- Uri, Noel D. & Boyd, Roy, 1988. "Crude oil imports into the United States," Applied Energy, Elsevier, vol. 31(2), pages 101-118.
- Stock, James H & Watson, Mark W, 1993.
"A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems,"
Econometric Society, vol. 61(4), pages 783-820, July.
- James H. Stock & Mark W. Watson, 1991. "A simple estimator of cointegrating vectors in higher order integrated systems," Working Paper Series, Macroeconomic Issues 91-3, Federal Reserve Bank of Chicago.
- Tom Doan, . "SWDOLS: RATS procedure to estimate cointegrating vectors using dynamic OLS," Statistical Software Components RTS00207, Boston College Department of Economics.
- Choi, Chi-Young & Hu, Ling & Ogaki, Masao, 2008. "Robust estimation for structural spurious regressions and a Hausman-type cointegration test," Journal of Econometrics, Elsevier, vol. 142(1), pages 327-351, January.
- Abdelhak Senhadji, 1998. "Time-Series Estimation of Structural Import Demand Equations: A Cross-Country Analysis," IMF Staff Papers, Palgrave Macmillan, vol. 45(2), pages 236-268, June.
- MacKinnon, James G, 1996.
"Numerical Distribution Functions for Unit Root and Cointegration Tests,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 11(6), pages 601-18, Nov.-Dec..
- James G. MacKinnon, 1995. "Numerical Distribution Functions for Unit Root and Cointegration Tests," Working Papers 918, Queen's University, Department of Economics.
- Carone, Giuseppe, 1996. "Modeling the U.S. demand for imports through cointegration and error correction," Journal of Policy Modeling, Elsevier, vol. 18(1), pages 1-48, February.
- Dipendra Sinha, 1997. "Determinants of Import Demand in Thailand," International Economic Journal, Taylor & Francis Journals, vol. 11(4), pages 73-873.
- Thursby, Jerry G & Thursby, Marie C, 1984. "How Reliable Are Simple, Single Equation Specifications of Import Demand?," The Review of Economics and Statistics, MIT Press, vol. 66(1), pages 120-28, February.
- Ziramba, Emmanuel, 2010. "Price and income elasticities of crude oil import demand in South Africa: A cointegration analysis," Energy Policy, Elsevier, vol. 38(12), pages 7844-7849, December.
- Ghosh, Sajal, 2009. "Import demand of crude oil and economic growth: Evidence from India," Energy Policy, Elsevier, vol. 37(2), pages 699-702, February.
- Masih, Rumi & Masih, Abul M. M., 1996. "Stock-Watson dynamic OLS (DOLS) and error-correction modelling approaches to estimating long- and short-run elasticities in a demand function: new evidence and methodological implications from an appl," Energy Economics, Elsevier, vol. 18(4), pages 315-334, October.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:30608. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.