International Interlinkages of Biofuel Prices: The Role of Biofuel Policies

Miroslava Rajcaniova, Dusan Drabik () and Pavel Ciaian

No 103222, 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania from Agricultural and Applied Economics Association

Abstract: Kliauga, de Gorter, and Just (2008) and de Gorter, Drabik, and Just (2010) argue that the United States and the European Union establish the world ethanol and biodiesel prices, respectively. We test these theories using a cointegration analysis and the Vector Error Correction (VEC) model. Weekly price series are analyzed for the major global biofuel producers (European Union, United States, and Brazil) for the period 2002 – 2010. Biofuel policies in both the United States and Brazil appear to play a role in determining the ethanol prices in other countries, thus only partially confirming the previous findings for the U.S. price leadership in the literature. For biodiesel, our results demonstrate that the EU tax exemption and mandate impact the world biodiesel price, thus confirming the European Union’s price leadership.

Keywords: Agricultural and Food Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 23
Date: 2011
New Economics Papers: this item is included in nep-agr and nep-ene
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Citations: View citations in EconPapers (11)

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Working Paper: International Interlinkages of Biofuel Prices: The Role of Biofuel Policies (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea11:103222

DOI: 10.22004/ag.econ.103222

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