TY - JOUR
T1 - Sustaining Standard of Living Amidst Volatile Oil Prices – Lessons from the Gulf Countries
AU - Khaleefah, Al Sabah
AU - Palliam, Ralph
AU - Al-Salem, Athmar
PY - 2016
Y1 - 2016
N2 - Improving living standards amidst falling oil prices among
countries relying heavily on an ample supply of oil presents
numerous challenges. Therefore, the relationship associated with
oil price changes with identifiable metrics that explain standards
of living becomes critical. The following issues are presented in
this paper: the management of wealth; sustaining a standard of
living; peculiarities of oil trade; oil price determination; and
management and the uncharacteristic application of supply and
demand. Since aspects of the world oil market remain unclear
and opaque, society is in need of credible research and verifiable
theory. Data relating to Kuwait over a 32-year period (1983 –
2014) were obtained. Five independent variables—investment
growth, inflation, percentage change in price per barrel,
unemployment, and percent change in the number of
incarcerations—are regressed with a change in real GDP
(dependent variable). Finally, to determine the robustness of the
model, the Durbin-Watson test was used. The coefficient of
determination (r2
) suggests that 66.24% of variations in lifestyle
can be explained by variations in the five independent variables
(p < 0.01). Standards of living can be sustained by increasing
growth in investment, decreasing inflation, decreasing
unemployment and incarcerations, and most importantly
increasing the price of oil. This study places Kuwait as a proxy
for the Gulf Countries and should ideally be extended to the
other five Gulf Countries. Comparative studies over multiple
periods of time ought to be undertaken to measure the robustness
of different sustainability measures.
AB - Improving living standards amidst falling oil prices among
countries relying heavily on an ample supply of oil presents
numerous challenges. Therefore, the relationship associated with
oil price changes with identifiable metrics that explain standards
of living becomes critical. The following issues are presented in
this paper: the management of wealth; sustaining a standard of
living; peculiarities of oil trade; oil price determination; and
management and the uncharacteristic application of supply and
demand. Since aspects of the world oil market remain unclear
and opaque, society is in need of credible research and verifiable
theory. Data relating to Kuwait over a 32-year period (1983 –
2014) were obtained. Five independent variables—investment
growth, inflation, percentage change in price per barrel,
unemployment, and percent change in the number of
incarcerations—are regressed with a change in real GDP
(dependent variable). Finally, to determine the robustness of the
model, the Durbin-Watson test was used. The coefficient of
determination (r2
) suggests that 66.24% of variations in lifestyle
can be explained by variations in the five independent variables
(p < 0.01). Standards of living can be sustained by increasing
growth in investment, decreasing inflation, decreasing
unemployment and incarcerations, and most importantly
increasing the price of oil. This study places Kuwait as a proxy
for the Gulf Countries and should ideally be extended to the
other five Gulf Countries. Comparative studies over multiple
periods of time ought to be undertaken to measure the robustness
of different sustainability measures.
UR - https://dspace.auk.edu.kw/handle/11675/7697
M3 - Article
VL - 15
SP - 101
EP - 118
JO - Consilience: The Journal of Sustainable Development
JF - Consilience: The Journal of Sustainable Development
IS - Iss. 1 (2016),
ER -