We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
TIME-VARYING LONG-RUN ELASTICITIES OF OIL DEMAND: EVIDENCE FROM AN EMERGING MARKET.
- Authors
ELEYAN, Mohammed Abu; ÇATIK, Abdurrahman Nazif; BALLI, Esra
- Abstract
This study estimates the elasticities of the time-varying oil demand function in Turkey. To this end, a time-varying cointegration (TVC) method is utilized that allows for smooth changes in parameters. The TVC findings indicate the variation in long-run parameters over time by rejecting the null hypothesis of time-invariant cointegration. Oil can be considered a necessary good based on inelastic income evidence because time-varying income parameters are statistically significant but inelastic for the majority of the estimation period. However, oil demand in Turkey appears to be unaffected by price fluctuations and is more responsive to changes in real economic activity. As a result, our findings suggest that regulating the price of oil products through the imposition of a consumption tax is not a viable way to reduce oil demand. Our findings emphasize the importance of developing policies that promote indigenous production and increase energy production from renewable sources.
- Subjects
TURKEY; ELASTICITY (Economics); EMERGING markets; ECONOMIC change; CONSUMPTION tax; DEMAND function
- Publication
Economic Computation & Economic Cybernetics Studies & Research, 2022, Vol 56, Issue 4, p141
- ISSN
0424-267X
- Publication type
Article
- DOI
10.24818/18423264/56.4.22.09