Food Versus Fuel: An Updated and Expanded Evidence

45 Pages Posted: 15 Nov 2017

See all articles by Ondrej Filip

Ondrej Filip

Institute of Economic Studies, Faculty of Social Sciences, Charles University

Karel Janda

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Ladislav Kristoufek

Charles University

David Zilberman

University of California, Berkeley - Department of Agricultural & Resource Economics

Date Written: November 13, 2017

Abstract

This paper replicates and extends the study of Zhang et al. (2010): “Food versus fuel: What do prices tell us?” Energy Policy 38, pp. 445-451. We confirm the findings of the original paper that there was only a weak relationship between ethanol and food commodities in the period between March 1989 and July 2008. In addition, we extend that study and examine the cointegration relationship between biofuels and related commodities for a considerably enlarged dataset (3 vs. 1 market, 26 vs. 8 commodities, analysis up till 2017 vs. 2008, weekly vs. monthly data frequency). Focusing on the biofuel markets of Brazil, the EU and the USA in the three separate periods before, during, and after the food crisis of 2007 and 2008, we show that studying the time variation of the relationships plays an essential role in their proper understanding. Our results help to clarify the wide extensive discussion about the role of biofuels prices in food shortages manifested particularly during the food crises. In agreement with the original study, we confirm that price series data do not support strong statements about biofuels uniformly serving as main leading source of high food prices and consequently the food shortages.

Keywords: Biofuels, Fuels, Food, Cointegration

JEL Classification: Q16, Q42, Q56

Suggested Citation

Filip, Ondrej and Janda, Karel and Kristoufek, Ladislav and Zilberman, David, Food Versus Fuel: An Updated and Expanded Evidence (November 13, 2017). CAMA Working Paper No. 73/2017. Available at SSRN: https://ssrn.com/abstract=3070704 or http://dx.doi.org/10.2139/ssrn.3070704

Ondrej Filip

Institute of Economic Studies, Faculty of Social Sciences, Charles University ( email )

Celetná 13
Praha 1, 116 36
Czech Republic

Karel Janda (Contact Author)

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

P.O. Box 882
7 Politickych veznu
Prague 1, 111 21
Czech Republic
+422 240 05 223 (Phone)
+422 242 11 374 (Fax)

HOME PAGE: http://www.cerge-ei.cz

Ladislav Kristoufek

Charles University ( email )

Celetná 13
Praha 1, 116 36
Czech Republic

David Zilberman

University of California, Berkeley - Department of Agricultural & Resource Economics ( email )

Berkeley, CA 94720
United States

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