Journal of Energy Markets

Risk.net

Gasoline price volatility and presidential elections in the United States: a linear model approach

Radin Ahmadian

ABSTRACT

Using historical data from 1919 to 2009 and based on economic and political variables such as the pattern and outcome of presidential elections, this study builds a model for predicting the price volatility of gasoline as a proxy for domestic energy value in the US. While the variability of energy tax policy, critical domestic and international events, and the crude oil market can account for around 72% of price fluctuations, the outcome and pattern of US presidential elections has also had a minor impact on the movement of gasoline price in the last ninety years. The impact of election politics is mainly related to power transfer from one party to another and whether the incumbent president was running for a second term.

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