Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/38650 
Full metadata record
DC FieldValueLanguage
dc.contributor.authorSalvo, Albertoen
dc.contributor.authorHuse, Christianen
dc.contributor.authorGoldbaum, Sergioen
dc.contributor.authorLima, Fernandaen
dc.date.accessioned2010-08-13T08:26:12Z-
dc.date.available2010-08-13T08:26:12Z-
dc.date.issued2007-
dc.identifier.urihttp://hdl.handle.net/10419/38650-
dc.description.abstractAs much of the world goes searching for alternative sources of energy to oil, Brazil's three-decade experience in developing a successful substitute for gasoline merits attention. Brazil is the only sizable economy to date to have developed a ubiquitously distributed alternative to oil-based fuels in road transportation: ethanol from sugarcane. Perhaps unsurprisingly, the uptake of flexible-fuel (dual-fuel) vehicle technology has been tremendous. We provide a stylized model of the vertical sugar industry which incorporates arbitrage by producers, across domestic and export markets for ethanol and sugar, and arbitrage by consumers, across ethanol and gasoline at the pump. We show that the model stands up well to the empirical covariation in prices over 30 years. In particular, owing to the increasing penetration of flexible-fuel vehicles, consumer arbitrage is tying the retail price of ethanol to that of gasoline. Of relevance to the current food-versus-fuel” debate, the outward shift of the ethanol demand curve, at price levels where traditional gasoline consumers arbitrage, may lead to higher sugar prices, thanks to substitution in demand (gasoline and ethanol) and in supply (sugar and ethanol).en
dc.language.isoengen
dc.publisher|aNorthwestern University, Center for the Study of Industrial Organization (CSIO) |cEvanston, ILen
dc.relation.ispartofseries|aCSIO Working Paper |x0093en
dc.subject.jelF19en
dc.subject.ddc330en
dc.subject.keywordEthanolen
dc.subject.keywordgasolineen
dc.subject.keywordsugaren
dc.subject.keywordbiofuelsen
dc.subject.keywordfood pricesen
dc.subject.keywordcommodity pricesen
dc.subject.keywordfood-versus-fuel debateen
dc.subject.keywordarbitrageen
dc.subject.keywordexport price flooren
dc.subject.keywordprice convergenceen
dc.subject.keywordflexible-fuel vehiclesen
dc.subject.stwBiokraftstoffen
dc.subject.stwProduktsubstitutionen
dc.subject.stwBenzinen
dc.subject.stwPreiselastizitäten
dc.subject.stwBrasilienen
dc.titleIs arbitrage tying the price of ethanol to that of gasoline? Evidence from the uptake of flexible-fuel technology-
dc.type|aWorking Paperen
dc.identifier.ppn574942629en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

Files in This Item:
File
Size
762.96 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.