Supply and demand elasticities in the U.S. ethanol fuel market

Luchansky, Matthew S.; Monks, James

doi:10.1016/j.eneco.2008.12.005

Cited by 76 publications

(53 citation statements)

References 6 publications

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“…First, as noted by Serra (2011), studies on volatility transmission between energy and agricultural markets are still scarce. Previous work has mainly focused on assessing price level links based on standard supply and demand frameworks and partial/general equilibrium models (e.g., Babcock, 2008;Luchansky and Monks, 2009) or based on vector error correction models (e.g., Balcombe and Raposomanikis, 2008;Serra et al, 2011). Few exceptions include Zhang et al (2009), Serra et al (2010) and Serra (2011) who examine price volatility interactions between energy and agricultural markets in the United States or Brazil following particular parametric and semiparametric multivariate GARCH models.…”

Section: Introductionmentioning

confidence: 99%

Do energy prices stimulate food price volatility? Examining volatility transmission between US oil, ethanol and corn markets

2013

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This paper examines volatility transmission in oil, ethanol and corn prices in the United States between 1997 and 2011. We follow a multivariate GARCH approach to evaluate the level of interdependence and the dynamics of volatility across these markets. The estimation results indicate a higher interaction between ethanol and corn markets in recent years, particularly after 2006 when ethanol became the sole alternative oxygenate for gasoline. We only observe, however, significant volatility spillovers from corn to ethanol prices but not the converse. We also do not find major cross-volatility effects from oil to corn markets. The results do not provide evidence of volatility in energy markets stimulating price volatility in grain markets.

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Section: Introductionmentioning

confidence: 99%

Do energy prices stimulate food price volatility? Examining volatility transmission between US oil, ethanol and corn markets

2013

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“…Rask analyzed the period from 1984 to 1993 and found a value of 0.75 for supply price elasticity. Luchansky & Monks (2009) analyzed a more recent period (1997)(1998)(1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006) and found a supply price elasticity of 0.2. These authors considered corn oil price as an explanatory variable in the supply model and found a significant, positive and inelastic elasticity.…”

Section: Empirical Evidence On the Sugarcane Industry Supplymentioning

confidence: 99%

“…In their model, those authors used ethanol price alone as an explanatory variable, plus a dummy variable for a period 2002-2006, due to an increase in oil prices in the international market. Supply price elasticities were estimated for the US ethanol market by Rask (1998) and Luchansky & Monks (2009). Rask analyzed the period from 1984 to 1993 and found a value of 0.75 for supply price elasticity.…”

Section: Empirical Evidence On the Sugarcane Industry Supplymentioning

confidence: 99%

Supply Behavior of Hydrous Ethanol in Brazil

Costa¹,

Burnquist

Valdes³

et al. 2015

Econ. Aplic.

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ResumoEste estudo construiu um modelo econômico para a oferta de etanol hidratado e de cana-de-açúcar no Brasil. Um modelo econométrico de dados em painel foi usado para estimar os modelos econômicos, utilizando as informações dos principais estados produtores, no período 2000/01-2011/12. Os resultados indicaram a elasticidade-preço da oferta de etanol hidratado de 0,75 e que o preço do etanol anidro teve uma influência relevante sobre o preço do etanol hidratado no período. Para a oferta de cana-de-açúcar, a área plantada e o número de usinas recém instaladas foram importantes para explicar a área plantada corrente.Palavras-chave: etanol hidratado; combustível; cana-de-açúcar; oferta; Brasil. AbstractThis study built an economic model for hydrous ethanol and sugarcane supply. A panel data econometric model was used to estimate the economic models, using data from the main producer states in Brazil and for the period 2000/01-2012/13. The results indicated that the supply price elasticity for hydrous ethanol was 0.75 and that anhydrous ethanol price had a relevant influence on hydrous ethanol price through this period. For the sugarcane supply, the planted area and the number of newly installed plants were important determinants of the current planted area.

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“…In microeconomic demand analysis [19,20], we usually deal with the elasticity of a demanded quantity with respect to a price, e ∆Pi/Pi . To avoid confusion, we call this elasticity a price transmission between assets i and j.…”

Section: Price Transmissionmentioning

confidence: 99%

Non-Linear Price Transmission between Biofuels, Fuels and Food Commodities

2013

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: For the biofuel markets and related commodities, we study their price transmission, which is in fact equivalent to studying price cross-elasticities. Importantly, we focus on the price dependence of the price transmission mechanism. Several methodological caveats are discussed. Specifically, we combine the memory robust feasible generalized least squares estimation with two-stage least squares to control for endogeneity bias and inconsistency. We find that both ethanol and biodiesel prices are responsive to their production factors (ethanol to corn, and biodiesel to German diesel). The strength of transmission between both significant pairs increased remarkably during the food crisis of 2007/2008. Terms of use: Documents in

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Supply and demand elasticities in the U.S. ethanol fuel market

Cited by 76 publications

References 6 publications

Do energy prices stimulate food price volatility? Examining volatility transmission between US oil, ethanol and corn markets

Do energy prices stimulate food price volatility? Examining volatility transmission between US oil, ethanol and corn markets

Supply Behavior of Hydrous Ethanol in Brazil

Non-Linear Price Transmission between Biofuels, Fuels and Food Commodities

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