Did U.S. consumers respond to the 2014-2015 oil price shock? Evidence from the consumer expenditure survey

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Bank of Canada Staff Working Paper ; No. 2018-13

Classification and Topics

• Classification: Wirtschaft ; Consumer Economics: Empirical Analysis ; Macroeconomics: Consumption; Saving; Wealth ; Energy and the Macroeconomy
• Subject: Business fluctuations and cycles ; Domestic demand and components ; Recent economic and financial developments

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Alexander, Patrick ; Poirier, Louis
• Event: Veröffentlichung
• (who): Bank of Canada
• (where): Ottawa
• (when): 2018

Further information

• DOI: doi:10.34989/swp-2018-13
• Handle: http://hdl.handle.net/10419/197866
• Last update: 10.03.2025, 11:43 AM CET