Oil price shocks and China’s consumer and entrepreneur sentiment: a Bayesian structural VAR approach

Peng Li () and Yaofu Ouyang ()
Additional contact information
Peng Li: Chinese Academy of Social Sciences
Yaofu Ouyang: Chinese Academy of Social Sciences

Empirical Economics, 2023, vol. 65, issue 5, No 9, 2271 pages

Abstract: Abstract This paper studies the effect of oil price shocks on China’s consumer and entrepreneur sentiment using a novel Bayesian inference structural vector autoregression model. Interestingly, we find that oil supply and demand shocks that raise oil prices have significantly positive effects on both consumer and entrepreneur sentiment. These effects are more significant on entrepreneur sentiment than on consumer sentiment. Furthermore, oil price shocks promote consumer sentiment mainly by increasing their satisfaction with current income and their expectation of future employment. Oil price shocks would change consumers’ saving and consumption decisions but not their plans to buy cars. Meanwhile, the effect of oil price shocks on entrepreneur sentiment differs across different types of enterprises and industries.

Keywords: Oil price shocks; Sentiment; Consumers; Entrepreneurs; Bayesian structural VAR (search for similar items in EconPapers)
JEL-codes: C32 E30 Q41 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s00181-023-02413-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:65:y:2023:i:5:d:10.1007_s00181-023-02413-x

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-023-02413-x

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().