cover image: Did U.S. Consumers Respond to the 2014–2015 Oil Price Shock?

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Did U.S. Consumers Respond to the 2014–2015 Oil Price Shock?

14 Mar 2018

“The impact of oil price shocks on the U.S. economy is a topic of considerable debate. In this paper, we examine the response of U.S. consumers to the 2014–2015 negative oil price shock using representative survey data from the Consumer Expenditure Survey. We propose a difference-in-difference identification strategy based on two factors, vehicle ownership and gasoline reliance, which generate variation in exposure to oil price shocks across consumers. Our findings suggest that exposed consumers significantly increased their spending relative to non-exposed consumers when oil prices fell, and that the average marginal propensity to consume out of gasoline savings was above 1. Across products, we find that consumers increased spending especially on transportation goods and non-essential items'--Abstract, p. ii.
health economics united states economy consumer price index mathematics prices regression analysis propensity score matching regression cpi errors and residuals ordinary least squares fixed effects model statistically coefficient of determination r-squared robustness difference-in-difference economy of the united states dependent variable ?xed effects marginal propensity to consume personal consumption expenditures price index
ISSN
17019397
Pages
35
Published in
Ottawa, ON, CA

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