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How Relevant Has Been the Learning-by-Doing for Brazilian Sugarcane Ethanol Production?

Hector Nuñez ()

No DTE 552, Working papers from CIDE, División de Economía

Abstract: This paper examines the role of several factors in reducing the production costs of Brazilian sugarcane ethanol, including learning-by-doing (LBD), economies of scale, rising factor prices, market competitiveness, and exogenous technological changes. Using the aggregate industry-level data over the period 1975- 2010, we find that the reduction in production costs of sugarcane ethanol was primarily driven by autonomous technological changes and unrelated to LBD. The increase in energy prices raised production costs of sugarcane ethanol, while the effects of other input prices on reducing production costs of sugarcane ethanol are found to be insignificant. By increasing the costs of procuring key inputs for ethanol production, market competitiveness had a negative effect on reducing production costs of sugarcane ethanol. The role of economies of scale in affecting sugarcane ethanol production costs is inconclusive depending on model specifications.

Keywords: Sugarcane ethanol, Production cost reductions, Learning-by-doing; Technological changes (search for similar items in EconPapers)
JEL-codes: O33 Q20 Q42 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2013-06
New Economics Papers: this item is included in nep-agr, nep-eff and nep-ene
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