What matters for consumer sentiment? World oil price or retail gasoline price?

Sofronis Clerides, Styliani Irida Krokida, Neophytos Lambertides and Dimitris Tsouknidis

University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics

Abstract: This paper examines the impact of oil supply and demand shocks on gasoline prices and consumer sentiment in the Euro Area. Results reveal that aggregate consumer sentiment and its components deteriorate notably as a response to positive shocks to real gasoline prices. On the contrary, positive oil-specific demand shocks do not trigger a deterioration of consumer sentiment. In other words, consumer sentiment is affected primarily by unexpected changes in gasoline prices at the pump rather than unexpected changes in crude oil prices. The analysis is further refined to analyze the effects of these shocks to six subcomponents of consumer sentiment.

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)
Pages: 21 pages
Date: 2020-05
New Economics Papers: this item is included in nep-ene
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Working Paper: What matters for consumer sentiment? World oil price or retail gasoline price? (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ucy:cypeua:05-2020

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