Econometric Analysis of Short-Run and Long-Run Determinants of Import Demand of Crude Oil and Petroleum Products in Thailand
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Abstract
The main objective of this study is to formulate a dynamic model to test for the short-run and long-run equilibrium relationship of the import demand of crude oil and petroleum products to the economic variables that affect the import demand. The short-run and long-run elasticities of the import demand of crude oil and petroleum products concerning price and income are empirically examined by using the econometric technique as a quantitative research method. The 26-sample group data are collected in form of time series secondary data annually from 1994 to 2019.
The results show that 1) The quantity of import demand of crude oil and petroleum products has a long-term positive equilibrium relationship with GDP and the domestic consumption of petroleum products; and has a long-term negative equilibrium relationship with the average import price of crude oil and petroleum products. In the short term, the quantity of import demand will adjust toward its long-run equilibrium with a speed of 75.79 percent each year. 2) The short-run and long-run price elasticities are estimated to be -0.129 and -0.182, while the income elasticities are 0.930 and 0.266, respectively. These elasticities imply that the import demand of crude oil and petroleum products responds to the changes of price slightly and slowly.
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