Quantifying the Impact of Exogenous Non-Economic Factors on UK Transport Oil Demand

David Broadstock and Lester Hunt

No 123, Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) from Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey

Abstract: This paper attempts to quantify the impact of exogenous non-economic factors on UK transport oil demand (in addition to income, price, and fuel efficiency) by estimating the demand relationship for oil transport for 1960-2007 using the Structural Time Series Model. From this, the relative impact on UK transport oil demand from income, price, and efficiency are quantified. Moreover, the impact of the non-economic factors is also quantified, based on the premise that the estimated stochastic trend represents behavioural responses to changes in socio-economic factors and changes in lifestyles and attitudes. The estimated elasticities for income, price and efficiency are 0.6, -0.1, and -0.3 respectively and it is shown that for efficiency and price the overall contribution is relatively small, whereas the contribution from income and non-economic factors is relatively large. This has important implications for policy makers keen to reduce transport oil consumption and associated emissions, but not willing to reduce the trend rate of economic growth. Taxes and improved efficiency only have a limited impact; hence, a major thrust of policy should perhaps be on educating and informing consumers to persuade them to change their lifestyle and attitudes and thus reduce their consumption through the non-economic instruments route.

Keywords: Transport oil demand; Structural Time Series Model, STSM; Underlying Energy Demand Trend, UEDT; Exogenous Non-Economic Factors, ExNEF. (search for similar items in EconPapers)
JEL-codes: C22 Q41 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2009-05
New Economics Papers: this item is included in nep-ene
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published in Energy Policy, 38(3), 2010, pp. 1559-1565. (Revised Version)

Downloads: (external link)
https://repec.som.surrey.ac.uk/seeds/SEEDS123.pdf (application/pdf)

Related works:
Journal Article: Quantifying the impact of exogenous non-economic factors on UK transport oil demand (2010)
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:sur:seedps:123

Access Statistics for this paper

More papers in Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) from Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey Contact information at EDIRC.
Bibliographic data for series maintained by Mona Chitnis ().