The non-linear impact of oil price on the oil demand

Ming-Cheng Wu, Andrew Yi-Hung Liang, Lori Tzu-Yi Yang and Chin-Mei Chou

Applied Economics, 2020, vol. 52, issue 45, 4992-5004

Abstract: A panel smooth transition regression model was adopted to analyse the non-linear impact of oil prices on oil demand. Data for 42 countries was obtained from the International Energy Agency for the time period spanning from January 1990 to June 2017. The results indicate that a threshold value does exist. Furthermore, when the oil price was lower than this threshold value, a positive relationship between oil price and oil demand was observed. When the price of oil was higher than the threshold value, however, a negative relationship between price and demand was found.

Date: 2020
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DOI: 10.1080/00036846.2020.1752898

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