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Biofuel and Food-Commodity Prices
Department of Agriculture, Food, and Resource Economics, Rutgers University, 55 Dudley Rd., New Brunswick, NJ 08901, USA
Department of Agriculture and Resource Economics, University of California Berkeley, 207 Giannini Hall, Berkeley, CA 94720, USA
Institute of Environment, University of California Los-Angeles, La Kretz Hall, Suite 300, Los Angeles, CA 90095, USA
* Author to whom correspondence should be addressed.
Received: 4 August 2012; in revised form: 10 September 2012 / Accepted: 18 September 2012 / Published: 24 September 2012
Abstract: The paper summarizes key findings of alternative lines of research on the relationship between food and fuel markets, and identifies gaps between two bodies of literature: one that investigates the relationship between food and fuel prices, and another that investigates the impact of the introduction of biofuels on commodity-food prices. The former body of literature suggests that biofuel prices do not affect food-commodity prices, but the latter suggests it does. We try to explain this gap, and then show that although biofuel was an important contributor to the recent food-price inflation of 2001–2008, its effect on food-commodity prices declined after the recession of 2008/09. We also show that the introduction of cross-price elasticity is important when explaining soybean price, but less so when explaining corn prices.
Keywords: biofuels; commodity-food prices; economic growth; energy prices; exchange rate
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Cite This Article
MDPI and ACS Style
Hochman, G.; Kaplan, S.; Rajagopal, D.; Zilberman, D. Biofuel and Food-Commodity Prices. Agriculture 2012, 2, 272-281.
Hochman G, Kaplan S, Rajagopal D, Zilberman D. Biofuel and Food-Commodity Prices. Agriculture. 2012; 2(3):272-281.
Hochman, Gal; Kaplan, Scott; Rajagopal, Deepak; Zilberman, David. 2012. "Biofuel and Food-Commodity Prices." Agriculture 2, no. 3: 272-281.