Oppdragsgivers prosjektnr.: 184739
Frisch prosjekt: 3162 - Petroleum industry research in economics and economic management
OPEC’s market power: An Empirical Dominant Firm Model for the Oil Market
Link to article:
Authors:
Golombek, Rolf, Alfonso A. Irarrazabal, Lin Ma
Year:
2018
Reference:
70, 98-115Summary
We estimate a dominant firm-competitive fringe model for the crude oil market using quarterly data on oil prices for the 1986-2016 period. The estimated structural parameters have the expected signs and are significant. We find that OPEC exercised market power during the sample period. Counterfactual experiments indicate that world GDP is the main driver of long-run oil prices. However, supply (depletion) factors have become more important in recent years.
JEL:
L13, L22, Q31
Keywords:
Oil, dominant firm, market power, OPEC, Lerner index, oil demand elasticity, oil supply elasticity
Project:
Oppdragsgiver: Norges forskningsråd, PETROSAMOppdragsgivers prosjektnr.: 184739
Frisch prosjekt: 3162 - Petroleum industry research in economics and economic management
