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Food versus Fuel: An Updated and Expanded Evidence

Author

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  • Ondrej Filip

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)

  • Karel Janda

    () (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic
    Dept. of Banking and Insurance, Faculty of Finance and Accounting, University of Economics, Namesti Winstona Churchilla 4, 130 67 Prague, Czech Republic)

  • Ladislav Kristoufek

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nabrezi 6, 111 01 Prague 1, Czech Republic)

  • David Zilberman

    (Department of Agricultural and Resource Economics, University of California, 207 Giannini Hall, Berkeley, CA 94720, USA)

Abstract

This paper replicates and extends the study of Zhang et al. (2010): „Food versus fuel: What do prices tell us?" Energy Policy 38, pp. 445-451. We confirm the findings of the original paper that there was only a weak relationship between ethanol and food commodities in the period between March 1989 and July 2008. In addition, we extend that study and examine the cointegration relationship between biofuels and related commodities for a considerably enlarged dataset (3 vs. 1 market, 26 vs. 8 commodities, analysis up till 2017 vs. 2008, weekly vs. monthly data frequency). Focusing on the biofuel markets of Brazil, the EU and the USA in the three separate periods before, during, and after the food crisis of 2007 and 2008, we show that studying the time variation of the relationships plays an essential role in their proper understanding. Our results help to clarify the wide extensive discussion about the role of biofuels prices in food shortages manifested particularly during the food crises. In agreement with the original study, we confirm that price series data do not support strong statements about biofuels uniformly serving as main leading source of high food prices and consequently the food shortages.

Suggested Citation

  • Ondrej Filip & Karel Janda & Ladislav Kristoufek & David Zilberman, 2017. "Food versus Fuel: An Updated and Expanded Evidence," Working Papers IES 2017/26, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Nov 2017.
  • Handle: RePEc:fau:wpaper:wp2017_26
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    File URL: http://ies.fsv.cuni.cz/sci/publication/show/id/5795/lang/en
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    1. repec:prg:jnlpol:v:2018:y:2018:i:2:id:1185:p:218-239 is not listed on IDEAS
    2. repec:eee:eneeco:v:76:y:2018:i:c:p:470-494 is not listed on IDEAS

    More about this item

    Keywords

    biofuels; fuels; food; cointegration;

    JEL classification:

    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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