A comparative study on oil price volatility and social instability: Evidence from 1970-2014

Abstract

In this research, we studied how oil prices volatility led to economic instability and then result in societal instability. To be specific, we explored a chain reaction where the inflation volatility, indicating economic instability, is the mediator and the civil unrest, indicating social instability, is the final result. Most of our research’s data are from the world bank (Gini, GDP per capita, oil price and inflation), civil unrest comes from the Urban Social Disorder 3.0 by Thomson et.al (2022). Based on those data we found not all countries’ number of civil unrest would be affected by the change of oil price. Only for those high-income countries which have imported a lot of oil there is a significant influence of oil price change on the number of civil unrests. 1% increase of the oil price will lead to 0.00614 more civil unrest among high-income import countries. We hope this chain reaction will be noticed in countries that could be affected and gives people multidimensional understanding about oil price volatility.