Tests for structural change in US oil consumption, 1967–1982

Abstract

The purpose of this paper is to test US oil consumption for structural change over the period 1967–1982. A frequently used functional form is posited for total petroleum consumption as well as for gasoline, distillate, and residual fuel. Tests for abrupt change (Chow) and gradual or conservation-like change (Durbin, Brown, Evans and Farley, Hinnich, McGuire) are employed at special break points (1973 embargo, 1979 Iranian crisis, 1980 recession) to check for abrupt changes and across years in general to detect gradual shifts. Both abrupt and gradual changes are found, although the last five years may be the beginning of a new non-changing period.