Electric Cars and Oil Prices

Azar, Jose (2009): Electric Cars and Oil Prices.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Oil prices; crude oil; electric cars; electric vehicles; Google Trends; Google Insights
• Subjects: G - Financial Economics > G1 - General Financial Markets; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy

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