Impact of Oil Price Volatility on State-Level Consumption of the United States: The Role of Oil Dependence

Renee van Eyden (), Rangan Gupta, Xin Sheng () and Mark Wohar ()
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Xin Sheng: Lord Ashcroft International Business School, Anglia Ruskin University, Chelmsford, CM1 1SQ, UK
Authors registered in the RePEc Author Service: Eric Olson ()

No 201969, Working Papers from University of Pretoria, Department of Economics

Abstract: In this study we analyse the impact of oil price uncertainty (as measured by an observable measure of oil price volatility, i.e. realised volatility) on state-level consumption by accounting for oil dependency. We account for both the long- and short-run dynamics of the state-level consumption function using a panel data approach over the quarterly period of 1975:Q1 to 2012:Q2, and simultaneously estimate the short-run impact of oil price volatility at the state-level conditional upon their oil dependency. We find that the negative impact of volatility is most severe for the states of Wyoming, Alaska and New Mexico, while the negative impact of volatility is least for Illinois, New York and Nebraska.

Keywords: Oil price volatility; oil dependency; U.S. state-level consumption (search for similar items in EconPapers)
JEL-codes: C23 E21 Q43 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2019-08
New Economics Papers: this item is included in nep-mon
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pre:wpaper:201969

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