Abstract
A statistical estimate of the factors causing a reduction in petroleum consumption in 1974 and 1975 is presented on a factor by factor basis. It is shown that higher real prices accounted for the largest reduction in the 1974 decline while reduced macroeconomic activity directly accounted for the largest reduction in the 1975 decline. Weather and all other factors are shown to have had smaller roles in explaining reductions in those years. Such an analysis is useful in evaluating the potential of various policy actions to reduce petroleum consumption and imports.