Files

Abstract

In Brazil, from the 2000s, the sugar-energy industry has grown. Between 2004 and 2009, ethanol sales increased 400%. However, between 2010 and 2014, a crisis settled in the sector, leading to the closure of several plants. Among the causes of the crisis, there was an anti-inflation control in the price of gasoline, which kept prices unchanged, reducing ethanol consumption intensely. This paper aims to verify the elasticity of demand for gasoline C and hydrated ethanol between 2004 and 2014 in Brazil. For this we used the cointegration vector and error correction model. The results indicated that the price elasticity and income elasticity of demand for both fuels are elastic. Therefore, it was concluded that the interference in gasoline prices and innovation of flex-fuel vehicles were the main factors that have altered the elasticity of demand for an elastic behavior in the short term. Not only, but also changes in the ethanol price caused more impact on gasoline demand than changes in the price of gasoline cause demand for ethanol.

Details

PDF

Statistics

from
to
Export
Download Full History