Title: Empirical study on energy prices volatility of China during 1980-2010

Authors: Minggang Wang; Zihao Tian; Lixin Tian

Addresses: Department of Mathematics, Taizhou College, Nanjing Normal University, Taizhou 225300, Jiangsu, China; Center for Energy Development and Environment Protection Strategy Research, Jiangsu University, Zhenjiang 212013, China ' College of Economics and Management, Nanjing University of Aeronautics and Astronautics, 29 Yudao Street, Nanjing 210016, China ' Department of Mathematics, Nanjing Normal University, Nanjing 210042, Jiangsu, China; Center for Energy Development and Environment Protection Strategy Research, Jiangsu University, Zhenjiang 212013, China

Abstract: This paper studies the oil, coal and power prices volatility of China based on grey relational analysis, factor analysis and partial least squares analysis. Firstly, we introduce the concept of the amended grey relational grade. Secondly, the history of Chinese economy is divided into four periods. And the relations between oil, coal and power prices are examined by applying the amended grey relational grade. Thirdly, using factor analysis model, we obtain the amended grey relational grade between supply and demand, general commodity prices, economic development, government monetary policy and energy prices are 0.8727, 0.7041, 0.6275 and 0.7451, respectively. Finally, we calculate the fluctuating relational grades between the affect factors and the three energy prices by applying PLS analysis, the results show that the relational grades between the affect factors and oil, coal, power prices are −0.5619∼0.9478, −0.3629∼0.9337, −0.5681∼0.4693, respectively.

Keywords: oil prices; coal prices; power prices; grey relational analysis; GRA; factor analysis; partial least squares; PLS; energy prices; price volatility; China.

DOI: 10.1504/IJGEI.2015.069484

International Journal of Global Energy Issues, 2015 Vol.38 No.1/2/3, pp.145 - 163

Received: 04 Aug 2014
Accepted: 18 Oct 2014

Published online: 18 May 2015 *

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