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Estimation of Korean LNG Price Allowing a Structural Change
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 Title & Authors
Estimation of Korean LNG Price Allowing a Structural Change
Cho, Hong Chong; Han, Wonhee;
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 Abstract
Almost all of natural gas demand in Korea is currently met by overseas LNG imports. More than 80% of LNG is imported through the mid to long-term contracts with oil-linked pricing. Despite LNG price estimation provides valuable information with various interested parties, an empirical study as well as an econometric model on LNG price hasn`t yet been available in Korea. This paper therefore, aims at analyzing not only whether the long-run equilibrium relationship between oil prices and Korean LNG prices exists but also whether structural change occurred in such relationship. Further, it aims at building a conditional VECM taking account of a structural change. According to the final model, an oil price shock is passed through to the LNG prices in nonlinear and different manner from the past.
 Keywords
LNG Price;Cointegration;Structural Change;Conditional VECM;
 Language
Korean
 Cited by
 References
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