Income and price elasticities and oil-saving technological changes in ARDL models of demand for oil in G7 and BRIC

摘要

In recent years, global growth of demand for oil has been mainly due to the increasing demand for energy in major developing nations, namely China, India and Brazil, fuelled by their exceptional economic performance. In the Organization for Economic Cooperation and Development (OECD), on the other hand, and particularly in the G7 countries where more than 70 per cent of OECD demand for oil is consumed, demand for oil has been stagnant and seems to be plateaued. Indeed, per capita consumption for oil in these countries has been diminishing in recent years. Given the rising share of the major developing economies in global demand for oil, increased attention to carbon emission and the recent ascending trends of oil prices have renewed interest in the likely paths of demand for oil in these economies and the role that energy policies and rising oil prices might play in oil-saving technological changes in the major oil-consuming nations. In this paper, an attempt is made to use time-series modelling techniques for estimating income and price elasticities of demand for oil in G7 and Brazil, Russia, India and China countries and to test whether oil-saving technological changes in these economies could be attributed to exogenous factors such as energy policies and regulations or should be considered mainly a matter of price-induced endogenous changes.