Biofuel and Food-Commodity Prices

Gal Hochman, Scott Kaplan (), Deepak Rajagopal and David Zilberman
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Deepak Rajagopal: Institute of Environment, University of California Los-Angeles, La Kretz Hall, Suite 300, Los Angeles, CA 90095, USA

Agriculture, 2012, vol. 2, issue 3, 1-10

Abstract: The paper summarizes key findings of alternative lines of research on the relationship between food and fuel markets, and identifies gaps between two bodies of literature: one that investigates the relationship between food and fuel prices, and another that investigates the impact of the introduction of biofuels on commodity-food prices. The former body of literature suggests that biofuel prices do not affect food-commodity prices, but the latter suggests it does. We try to explain this gap, and then show that although biofuel was an important contributor to the recent food-price inflation of 2001–2008, its effect on food-commodity prices declined after the recession of 2008/09. We also show that the introduction of cross-price elasticity is important when explaining soybean price, but less so when explaining corn prices.

Keywords: biofuels; commodity-food prices; economic growth; energy prices; exchange rate (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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