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          2010 Annual Meeting, July 25-27, 2010, Denver, Colorado >

Please use this identifier to cite or link to this item: http://purl.umn.edu/61009

Title: Interdependencies in the Energy-Bioenergy-Food Price Systems: A Cointegration Analysis
Authors: Ciaian, Pavel
Kancs, d'Artis
Authors (Email): Ciaian, Pavel (pavel.ciaian@ec.europa.eu)
Kancs, d'Artis (d'Artis.Kancs@ec.europa.eu)
Keywords: Energy
bioenergy
crude oil
renewable fuel
cointegration
JEL Codes: C14
C22
C51
Q11
Q13
Q42
Issue Date: 2010
Series/Report no.: Selected Poster
11269
Abstract: The present paper examines a long-run relationship between the energy, bioenergy and food prices. In the recent years the bioenergy production has increased significantly around the world. The increase has been driven by rising energy prices as well as by environmental policies aiming at reducing the harmful effects of conventional sources of energy, such as climate change. Bioenergy, in turn, affects agricultural markets, because it uses agricultural commodities as inputs. The theoretical model we develop predicts that, because of price inelastic food demand, the agricultural price increase may be substantial. The empirical findings confirm the theoretical hypothesis that energy prices do affect prices of agricultural commodities. However, the co-integration is weaker than theoretically predicted. The price effect of bioenergy might be mitigated by new technological development, which improve yields and lead to an offsetting effect in the supply of agricultural commodities, and by fallow land brought into cultivation, when agricultural profitability is rising.
URI: http://purl.umn.edu/61009
Institution/Association: Agricultural and Applied Economics Association>2010 Annual Meeting, July 25-27, 2010, Denver, Colorado
Total Pages: 44
Collections:2010 Annual Meeting, July 25-27, 2010, Denver, Colorado

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