Correlations between biofuels and related commodities before and during the food crisis: A taxonomy perspective

Ladislav Krištoufek (), Karel Janda and David Zilberman

Energy Economics, 2012, vol. 34, issue 5, 1380-1391

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. When the periods before and after the food crisis of 2007/2008 are compared, the connections are much stronger for the post-crisis period. This is the first application of this methodology on the biofuel systems.

Keywords: Biofuels; Networks; Minimal spanning tree; Hierarchical tree (search for similar items in EconPapers)
JEL-codes: C38 Q16 Q42 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (89)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:34:y:2012:i:5:p:1380-1391

DOI: 10.1016/j.eneco.2012.06.016

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