Econometric Analysis of Petroleum Consumption and Economic Growth in West China

With petroleum consumption as an independent factor to join the C-D production function model and comprehensive technical level as a variable,an econometric analysis is done of the relationship between petroleum consumption and economic growth from 1996 to 2011in West China by means of cointegration analysis,ridge regression analysis and Granger causality test.The results indicate that a two-way Granger causality exists between economic growth and petroleum consumption in a short period.Furthermore,with the increase of lag phase,economic growth may further promote the consumption of petroleum in this region.As an important element of energy in West China,Petroleum will continue to support the economic development in this region.Therefore,we can achieve a win-win between petroleum consumption and economic development by increasing the utilization of petroleum,establishing an early warning mechanism about petroleum consumption,and formulating the western petroleum development strategy and so on.