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Energy Pricing during the COVID-19 Pandemic: Predictive Information-Based Uncertainty Indexes with Machine Learning Algorithm

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Listed:
  • Olubusoye, Olusanya E
  • Akintande, Olalekan J.
  • Yaya, OlaOluwa S.
  • Ogbonna, Ahamuefula
  • Adenikinju, Adeola F.

Abstract

The study investigates the impact of uncertainties on energy pricing during the COVID-19 pandemic using five uncertainty measures that include the COVID-Induced Uncertainty (CIU), Economic Policy Uncertainty (EPU), Global Fear Index (GFI); Volatility Index (VIX), and the Misinformation Index of Uncertainty (MIU). The data, which span between 2-January, 2020 and 19-January, 2021, corresponding to the period of the COVID-19 pandemic. The study finds energy prices to respond significantly to the examined uncertainty measures, with EPU seen to affect the prices of most energy types during the pandemic. We also find predictive potentials inherent in VIX, CIU, and MIU for global energy sources.

Suggested Citation

  • Olubusoye, Olusanya E & Akintande, Olalekan J. & Yaya, OlaOluwa S. & Ogbonna, Ahamuefula & Adenikinju, Adeola F., 2021. "Energy Pricing during the COVID-19 Pandemic: Predictive Information-Based Uncertainty Indexes with Machine Learning Algorithm," MPRA Paper 109838, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:109838
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    References listed on IDEAS

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    7. Olubusoye, Olusanya E & Yaya, OlaOluwa S. & Ogbonna, Ahamuefula, 2021. "An Information-Based Index of Uncertainty and the predictability of Energy Prices," MPRA Paper 109839, University Library of Munich, Germany.
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    Cited by:

    1. Yagi, Michiyuki & Managi, Shunsuke, 2023. "The spillover effects of rising energy prices following 2022 Russian invasion of Ukraine," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 680-695.
    2. Khan, Khalid & Su, Chi-Wei & Khurshid, Adnan & Umar, Muhammad, 2022. "COVID-19 impact on multifractality of energy prices: Asymmetric multifractality analysis," Energy, Elsevier, vol. 256(C).
    3. Ahmed Mohamed Habib & Umar Nawaz Kayani, 2024. "Price reaction of global economic indicators: evidence from the COVID-19 pandemic and the Russia–Ukraine conflict," SN Business & Economics, Springer, vol. 4(1), pages 1-21, January.
    4. Cebotari Livia & Paierele Ada, 2024. "Economic Effects of rising Energy Prices," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 18(1), pages 295-302.
    5. Zhao, Zilong & Lv, Guoquan & Xu, Yanwen & Lin, Yu-Feng & Wang, Pingfeng & Wang, Xinlei, 2024. "Enhancing ground source heat pump system design optimization: A stochastic model incorporating transient geological factors and decision variables," Renewable Energy, Elsevier, vol. 225(C).
    6. Muneer M. Alshater & Ilias Kampouris & Hazem Marashdeh & Osama F. Atayah & Hasanul Banna, 2025. "Early warning system to predict energy prices: the role of artificial intelligence and machine learning," Annals of Operations Research, Springer, vol. 345(2), pages 1297-1333, February.

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    More about this item

    Keywords

    Coronavirus pandemic; Energy market; Machine Learning; Uncertainty;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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