Energy News Shocks, Income and Consumption: Evidence from the Russia-China Gas Pipeline

Yang Yang, Sambit Bhattacharyya, Chirantan Chatterjee and Jiao Wang

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: We study the effect of Russia-China gas pipeline news shock on energy importer China. We demonstrate that the shock triggers an expectation induced current price increase likely through increased demand in gas futures contract. Using panel data covering 31 provinces, 19 industries, and 4,603 households over the period 2010 to 2022, we find that the shock reduces income and consumption. At the province-year level, consumption falls more than income. At the industry-year-province level, the shock reduces wages overall. However, the effect appears to be heterogeneous across industries subject to their operational scale. At the household level, the effect of the shock is negative on income and statistically insignificant on consumption. However, the insignificant consumption effect is heterogeneous by income quantiles, with lower income households reducing consumption more sharply. The results appear robust to price-intensity treatment, placebo tests, and matching estimators.

Keywords: energy news shocks; income; consumption; China (search for similar items in EconPapers)
JEL-codes: D72 O11 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2026-09
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2026-74

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