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Relationship Between Prices of Food, Fuel and Biofuel

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  • Kristoufek, Ladislav
  • Janda, Karel
  • Zilberman, David

Abstract

In this paper, we analyze the relationships between the prices of biodiesel, ethanol and related fuels and agricultural commodities with a use of minimal spanning trees and hierarchical trees. To distinguish between short-term and medium-term effects, we construct these trees for different frequencies (weekly and monthly). We find that in short-term, both ethanol and biodiesel are very weakly connected with the other commodities. In medium-term, the biofuels network becomes more structured. The system splits into two well separated branches – a fuels part and a food part. Biodiesel tends to the fuels branch and ethanol to the food branch. As a part of this paper we also characterize the major biofuels and their agricultural feedstock and we outline their recent quantitative development.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 131st Seminar, September 18-19, 2012, Prague, Czech Republic with number 135793.

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Date of creation: 18 Sep 2012
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Handle: RePEc:ags:eaa131:135793

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Keywords: biofuels; networks; minimal spanning tree; hierarchical tree; Agribusiness; Agricultural and Food Policy;

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