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Are there multiple bubbles in the ethanol–gasoline price ratio of Brazil?

Ghassen El Montasser, Rangan Gupta (), Andre Luis Martins and Peter Wanke

Renewable and Sustainable Energy Reviews, 2015, vol. 52, issue C, 19-23

Abstract: This paper tests for the existence of bubbles in the ethanol–gasoline price ratio in Brazil from 2000 to 2012 using right-tailed ADF tests. Results suggest the existence of two bubbles: one which has already burst (during the re-election of President Lula); and one which has been ongoing since 2010, thus corroborating empirical and anecdotal evidence in the Brazilian sugarcane industry. Freezing gasoline prices not only depressed ethanol prices but also depressed investments in new sugarcane crops and distillation plants.

Keywords: Brazil; Bubbles; Ethanol–gasoline price-ratio; Right-tailed ADF tests (search for similar items in EconPapers)
Date: 2015
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Working Paper: Are there Multiple Bubbles in the Ethanol-Gasoline Price Ratio of Brazil? (2014)
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DOI: 10.1016/j.rser.2015.07.085

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