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Electric Cars and Oil Prices

Author

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  • Azar, Jose

Abstract

This paper studies the joint dynamics of oil prices and interest in electric cars, measured as the volume of Google searches for related phrases. Not surprisingly, I find that oil price shocks predict increases in Google searches for electric cars. Much more surprisingly, I also find that an increase in Google searches predicts declines in oil prices. The high level of public interest in electric cars between April and August of 2008 can explain approximately half of the decline in oil prices during the second half of 2008. These findings are significant because they show that oil markets respond to developments related to alternative technologies. I investigate several hypotheses explaining these results.

Suggested Citation

  • Azar, Jose, 2009. "Electric Cars and Oil Prices," MPRA Paper 15538, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:15538
    as

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    File URL: https://mpra.ub.uni-muenchen.de/15538/1/MPRA_paper_15538.pdf
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    References listed on IDEAS

    as
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Predicting oil prices from interest in electric cars
      by Economic Logician in Economic Logic on 2009-09-18 19:36:00

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    Cited by:

    1. Heather R. Tierney & Bing Pan, 2012. "A poisson regression examination of the relationship between website traffic and search engine queries," Netnomics, Springer, vol. 13(3), pages 155-189, October.
    2. Jun, Seung-Pyo & Park, Do-Hyung & Yeom, Jaeho, 2014. "The possibility of using search traffic information to explore consumer product attitudes and forecast consumer preference," Technological Forecasting and Social Change, Elsevier, vol. 86(C), pages 237-253.

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    More about this item

    Keywords

    Oil prices; crude oil; electric cars; electric vehicles; Google Trends; Google Insights;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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