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What matters for consumer sentiment in the euro area? World crude oil price or retail gasoline price?

Sofronis Clerides, Styliani-Iris Krokida, Neophytos Lambertides and Dimitris Tsouknidis ()

Energy Economics, 2022, vol. 105, issue C

Abstract: We investigate the link between crude oil prices, retail gasoline prices and consumer sentiment in the euro area. Our results reveal that consumer sentiment and its key components deteriorate notably as a response to positive shocks to real gasoline prices at the pump. On the contrary, positive oil-specific demand shocks do not trigger such a strong deterioration of consumer sentiment. The analysis is further refined to analyse the effects of these shocks to six key sub-components of consumer sentiment, which include household finance, conditions for buying durable products and the macroeconomy.

Keywords: Oil supply and demand shocks; Gasoline prices; Consumer sentiment; Euro area (search for similar items in EconPapers)
JEL-codes: G10 G11 G12 G14 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.eneco.2021.105743

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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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