Oil price fluctuations and oil consuming sectors

An empirical analysis of Japan

Farhad Taghi Zadeh Hesary, Ehsan Rasoulinezhad, Yoshikazu Kobayashi

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

Since the oil price shocks of the 1970s, several studies have found significant impacts of oil prices on macro variables. However, it is particularly crucial to know how each micro sector in an economy, such as the residential, transport, industrial and non-energy sectors, respond to oil price impulses. In this research, we try to shed light on the impact of crude oil price volatility on each sector in Japan, the world’s third-largest crude oil consumer. In order to do so, we apply a vector auto regression model and perform impulse response analysis by using quarterly data from Q1 1990 to Q1 2014. The findings indicate that some economic sectors, such as the residential sector, did not have significant sensitivity to the sharp oil price fluctuations. In contrast, some other sectors, like the commercial, industrial, and transport sectors, were strongly sensitive to the drastic oil price fluctuations. Moreover, our findings show that after the Fukushima disaster in 2011, which led to the shutdown of nuclear power plants in Japan, because of greater reliance on oil imports, the sensitivity of most sectors to oil price volatility declined.

Original languageEnglish
Pages (from-to)33-51
Number of pages19
JournalEconomics and Policy of Energy and the Environment
Volume2016
Issue number2
DOIs
Publication statusPublished - 2016 Jan 1
Externally publishedYes

Fingerprint

empirical analysis
oil
crude oil
Crude oil
vector autoregression
Plant shutdowns
response analysis
nuclear power plant
price
Oils
Empirical analysis
Oil
Fluctuations
Oil prices
Japan
Impulse response
Disasters
Nuclear power plants
import
Macros

Keywords

  • Fukushima nuclear disaster
  • Japanese economy
  • Oil price

ASJC Scopus subject areas

  • Renewable Energy, Sustainability and the Environment
  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

Cite this

Oil price fluctuations and oil consuming sectors : An empirical analysis of Japan. / Taghi Zadeh Hesary, Farhad; Rasoulinezhad, Ehsan; Kobayashi, Yoshikazu.

In: Economics and Policy of Energy and the Environment, Vol. 2016, No. 2, 01.01.2016, p. 33-51.

Research output: Contribution to journalArticle

@article{7a772aac9961488282f73fe1b57161db,
title = "Oil price fluctuations and oil consuming sectors: An empirical analysis of Japan",
abstract = "Since the oil price shocks of the 1970s, several studies have found significant impacts of oil prices on macro variables. However, it is particularly crucial to know how each micro sector in an economy, such as the residential, transport, industrial and non-energy sectors, respond to oil price impulses. In this research, we try to shed light on the impact of crude oil price volatility on each sector in Japan, the world’s third-largest crude oil consumer. In order to do so, we apply a vector auto regression model and perform impulse response analysis by using quarterly data from Q1 1990 to Q1 2014. The findings indicate that some economic sectors, such as the residential sector, did not have significant sensitivity to the sharp oil price fluctuations. In contrast, some other sectors, like the commercial, industrial, and transport sectors, were strongly sensitive to the drastic oil price fluctuations. Moreover, our findings show that after the Fukushima disaster in 2011, which led to the shutdown of nuclear power plants in Japan, because of greater reliance on oil imports, the sensitivity of most sectors to oil price volatility declined.",
keywords = "Fukushima nuclear disaster, Japanese economy, Oil price",
author = "{Taghi Zadeh Hesary}, Farhad and Ehsan Rasoulinezhad and Yoshikazu Kobayashi",
year = "2016",
month = "1",
day = "1",
doi = "10.3280/EFE2016-002003",
language = "English",
volume = "2016",
pages = "33--51",
journal = "Economics and Policy of Energy and the Environment",
issn = "2280-7659",
publisher = "Franco Angeli Edizioni",
number = "2",

}

TY - JOUR

T1 - Oil price fluctuations and oil consuming sectors

T2 - An empirical analysis of Japan

AU - Taghi Zadeh Hesary, Farhad

AU - Rasoulinezhad, Ehsan

AU - Kobayashi, Yoshikazu

PY - 2016/1/1

Y1 - 2016/1/1

N2 - Since the oil price shocks of the 1970s, several studies have found significant impacts of oil prices on macro variables. However, it is particularly crucial to know how each micro sector in an economy, such as the residential, transport, industrial and non-energy sectors, respond to oil price impulses. In this research, we try to shed light on the impact of crude oil price volatility on each sector in Japan, the world’s third-largest crude oil consumer. In order to do so, we apply a vector auto regression model and perform impulse response analysis by using quarterly data from Q1 1990 to Q1 2014. The findings indicate that some economic sectors, such as the residential sector, did not have significant sensitivity to the sharp oil price fluctuations. In contrast, some other sectors, like the commercial, industrial, and transport sectors, were strongly sensitive to the drastic oil price fluctuations. Moreover, our findings show that after the Fukushima disaster in 2011, which led to the shutdown of nuclear power plants in Japan, because of greater reliance on oil imports, the sensitivity of most sectors to oil price volatility declined.

AB - Since the oil price shocks of the 1970s, several studies have found significant impacts of oil prices on macro variables. However, it is particularly crucial to know how each micro sector in an economy, such as the residential, transport, industrial and non-energy sectors, respond to oil price impulses. In this research, we try to shed light on the impact of crude oil price volatility on each sector in Japan, the world’s third-largest crude oil consumer. In order to do so, we apply a vector auto regression model and perform impulse response analysis by using quarterly data from Q1 1990 to Q1 2014. The findings indicate that some economic sectors, such as the residential sector, did not have significant sensitivity to the sharp oil price fluctuations. In contrast, some other sectors, like the commercial, industrial, and transport sectors, were strongly sensitive to the drastic oil price fluctuations. Moreover, our findings show that after the Fukushima disaster in 2011, which led to the shutdown of nuclear power plants in Japan, because of greater reliance on oil imports, the sensitivity of most sectors to oil price volatility declined.

KW - Fukushima nuclear disaster

KW - Japanese economy

KW - Oil price

UR - http://www.scopus.com/inward/record.url?scp=85022206378&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85022206378&partnerID=8YFLogxK

U2 - 10.3280/EFE2016-002003

DO - 10.3280/EFE2016-002003

M3 - Article

VL - 2016

SP - 33

EP - 51

JO - Economics and Policy of Energy and the Environment

JF - Economics and Policy of Energy and the Environment

SN - 2280-7659

IS - 2

ER -