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A time-frequency-based interval decomposition ensemble method for forecasting gasoil prices under the trend of low-carbon development

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  • Yan, Zichun
  • Tian, Fangzhu
  • Sun, Yuying
  • Wang, Shouyang
Abstract
Given that gasoil plays a crucial role in carbon emission reduction, in this paper we propose a time-frequency-based interval decomposition ensemble (TFIDE) learning approach to forecast gasoil prices and capture the nonlinear impact of the global trend of low-carbon development on gasoil prices. The proposed method integrates bivariate empirical mode decomposition (BEMD), an interval multilayer perceptron (IMLP) network and a threshold autoregressive interval (TARI) model. First, we use BEMD to decompose interval-valued weekly gasoil prices into a finite number of complex-valued intrinsic mode function (IMF) components and a residual component. Second, we apply the IMLP model to forecast the IMFs and the TARI model to predict the residual part with predictors of carbon reduction technology and carbon emission concerns. After that, we combine all the forecasting results to generate the final gasoil price interval forecasting results. Our empirical results show that our carbon reduction technology variable improves middle-frequency IMF forecasting and that carbon emission concerns have a nonlinear impact on long-term gasoil price intervals. Furthermore, the proposed TFIDE approach outperforms other competing methods under different accuracy measurements.

Suggested Citation

  • Yan, Zichun & Tian, Fangzhu & Sun, Yuying & Wang, Shouyang, 2024. "A time-frequency-based interval decomposition ensemble method for forecasting gasoil prices under the trend of low-carbon development," Energy Economics, Elsevier, vol. 134(C).
    • Handle: RePEc:eee:eneeco:v:134:y:2024:i:c:s0140988324003177
    DOI: 10.1016/j.eneco.2024.107609
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