Biofuels and vertical price transmission: the case of the U.S. corn, ethanol and food markets

Dusan Drabik (), Pavel Ciaian and Jan Pokrivcak

No 182697, 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia from European Association of Agricultural Economists

Abstract: This is the first paper to analyze the impact of biofuels on the price transmission along the food chain. Specifically, we analyze the U.S. corn sector and its vertical links to food and ethanol markets. The key result of this paper is that the presence of biofuels affects the price transmission elasticity only when the blender's tax credit is binding and the shock originates in the food market. Our another important result is that the response of corn and food prices to exogenous shocks in the corn or food markets is always lower in the presence of biofuels when the tax credit is binding. However, the results are mixed for the binding mandate. The sensitivity analyses indicate that our results are robust to different assumptions about the model parameters.

Keywords: Demand and Price Analysis; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 14
Date: 2014-08
New Economics Papers: this item is included in nep-agr and nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://ageconsearch.umn.edu/record/182697/files/D ... ansmission-512_a.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae14:182697

DOI: 10.22004/ag.econ.182697

Access Statistics for this paper

More papers in 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia from European Association of Agricultural Economists Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().