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 results in societal instability. To be specific, we explored a chain reaction where the inflation volatility, indicating economic instability, is the mediator and 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), while civil unrest data 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 unrests would be affected by the change of oil price. Only for those high-income countries which have imported a lot of oil is there a significant influence of oil price change on the number of civil unrests. A 1% increase in the oil price will lead to 0.00614 more civil unrests among high-income import countries. We hope this chain reaction will be noticed in countries that could be affected and gives people a multidimensional understanding about oil price volatility.