Comments on: Price elasticity of oil http://langabi.name/blog/2005/03/23/price-elasticity-of-oil Paul Cook's blog Wed, 10 Mar 2010 18:14:22 +0000 http://wordpress.org/?v=2.6.2 By: Tubby Bartles http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-1785 Tubby Bartles Sun, 14 May 2006 05:27:20 +0000 http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-1785 Sorry, should have cited source. Short-term price elasticity of -0.06 for oil in the US (quite low - not much change in demand at all for oil when the price rises). Long term price elasticity of -0.4556 - not huge, but very respectable and represents a signficant cutback in oil usage - almost 50% if prices double. Source: http://alpha.qmul.ac.uk/~bsw019/oil.pdf (Simply a survey of oil price elasticities for 23 major countries) Sorry, should have cited source. Short-term price elasticity of -0.06 for oil in the US (quite low - not much change in demand at all for oil when the price rises). Long term price elasticity of -0.4556 - not huge, but very respectable and represents a signficant cutback in oil usage - almost 50% if prices double.

Source: http://alpha.qmul.ac.uk/~bsw019/oil.pdf
(Simply a survey of oil price elasticities for 23 major countries)

]]> By: Tubby Bartles http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-1784 Tubby Bartles Sun, 14 May 2006 04:50:07 +0000 http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-1784 Hm. Would be true, except that your statement about the price elasticity of oil is incorrect. The short-term price elasticity of oil isn't huge - you aren't going to switch from a Hummer to a Prius tomorrow just because gas is now $3 a gallon. However, 3 years from now when it's time to switch, the gas prices will be a consideration. The long-term price elasticity of oil is actually quite high - last I looked at the latest studies, it could be as high as -0.47 over 3 years. Hm. Would be true, except that your statement about the price elasticity of oil is incorrect. The short-term price elasticity of oil isn’t huge - you aren’t going to switch from a Hummer to a Prius tomorrow just because gas is now $3 a gallon.

However, 3 years from now when it’s time to switch, the gas prices will be a consideration. The long-term price elasticity of oil is actually quite high - last I looked at the latest studies, it could be as high as -0.47 over 3 years.

]]> By: tisiwoota :: Arthur Dent and Alternative Energy :: March :: 2005 http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-210 tisiwoota :: Arthur Dent and Alternative Energy :: March :: 2005 Thu, 14 Apr 2005 03:11:34 +0000 http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-210 [...] lth So yesterday I read Paul.za`s excellent post on the approximately-imminent oil situation. Just now it occurred to me to idly [...] [...] lth So yesterday I read Paul.za`s excellent post on the approximately-imminent oil situation. Just now it occurred to me to idly [...]

]]> By: Langabi.name Blog » Why “Peak Oil” isn’t what really worries me http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-200 Langabi.name Blog » Why “Peak Oil” isn’t what really worries me Sat, 09 Apr 2005 02:17:51 +0000 http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-200 [...] ’ll ever see, and it’s downhill from there. This post follows from my post on Price Elasticity of Oil, as well as this post on blogwaffe, and a whole collection of [...] [...] ’ll ever see, and it’s downhill from there. This post follows from my post on Price Elasticity of Oil, as well as this post on blogwaffe, and a whole collection of [...]

]]> By: Griztown http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-148 Griztown Thu, 24 Mar 2005 23:58:25 +0000 http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-148 Yeah, all the conspiracy theory people on the internet are convinced that Bush and Cheney knew about the oil depletion and went into Iraq solely to horde the oil for the US. Quite a stretch but one would assume looking back that oil was the primary reason for going into Iraq. Yeah, all the conspiracy theory people on the internet are convinced that Bush and Cheney knew about the oil depletion and went into Iraq solely to horde the oil for the US. Quite a stretch but one would assume looking back that oil was the primary reason for going into Iraq.

]]> By: paulcook http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-147 paulcook Thu, 24 Mar 2005 20:02:30 +0000 http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-147 Ironically, the current somewhat slow rise in prices might act to speed us along with the changes I mention above. It would be extremely ironic if the "silver lining" of the mess in Iraq was that we weathered the oil crunch better! Good link, thanks! Ironically, the current somewhat slow rise in prices might act to speed us along with the changes I mention above. It would be extremely ironic if the “silver lining” of the mess in Iraq was that we weathered the oil crunch better!

Good link, thanks!

]]> By: Griztown http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-146 Griztown Thu, 24 Mar 2005 05:50:53 +0000 http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-146 A good site to check oil prices is the New York Mercantile Exchange. <a href="http://www.nymex.com/jsp/markets/lsco_fut_cso.jsp" rel="nofollow">Light Sweet Crude Oil</a> A good site to check oil prices is the New York Mercantile Exchange.

Light Sweet Crude Oil

]]> By: Griztown http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-145 Griztown Thu, 24 Mar 2005 01:14:20 +0000 http://langabi.name/blog/2005/03/23/price-elasticity-of-oil#comment-145 Paul, excellent post! Well said. An interesting way to compare previous oil shocks to this one is to look at the long term contracts on oil futures. In previous oil shocks, the long term (five years out) contracts held steady but now the prices on the long term contracts are rising faster than the short term contracts. So oil traders seem to think that the long term oil outlook is bad. I also like your point on food production and how its tied to oil. I read a piece once that showed the rise in oil consumption and the rise in population. Amazing how closely they're tied together. Paul, excellent post! Well said. An interesting way to compare previous oil shocks to this one is to look at the long term contracts on oil futures. In previous oil shocks, the long term (five years out) contracts held steady but now the prices on the long term contracts are rising faster than the short term contracts. So oil traders seem to think that the long term oil outlook is bad.

I also like your point on food production and how its tied to oil. I read a piece once that showed the rise in oil consumption and the rise in population. Amazing how closely they’re tied together.

]]>