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How Relevant Has Been the Learning-by-Doing for Brazilian Sugarcane Ethanol Production?

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  • Héctor M. Núñez

    (Division of Economics, CIDE)

Abstract

This paper examines the role of several factors in reducing the production costs of Brazilian sugarcane ethanol, including learning-by-doing (LBD), economies of scale, rising factor prices, market competitiveness, and exogenous technological changes. Using the aggregate industry-level data over the period 1975- 2010, we find that the reduction in production costs of sugarcane ethanol was primarily driven by autonomous technological changes and unrelated to LBD. The increase in energy prices raised production costs of sugarcane ethanol, while the effects of other input prices on reducing production costs of sugarcane ethanol are found to be insignificant. By increasing the costs of procuring key inputs for ethanol production, market competitiveness had a negative effect on reducing production costs of sugarcane ethanol. The role of economies of scale in affecting sugarcane ethanol production costs is inconclusive depending on model specifications.

Suggested Citation

  • Héctor M. Núñez, 2013. "How Relevant Has Been the Learning-by-Doing for Brazilian Sugarcane Ethanol Production?," Working papers DTE 552, CIDE, División de Economía.
    • Handle: RePEc:emc:wpaper:dte552
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    References listed on IDEAS

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    More about this item

    Keywords

    Sugarcane ethanol; Production cost reductions; Learning-by-doing; Technological changes;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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