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Elasticidade-preço da Demanda por Etanol no Brasil: como renda e preços relativos explicam diferenças entre estados

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  • Orellano, Veronica Fernandez
  • Souza, Alberto De Nes de
  • Azevedo, Paulo Furquim de

Abstract

This article analyzes the demand for ethanol in Brazil, from 2001 to 2009, taking into account regional differences in regard of relative price and per capita income. These elements explain significant variability of demand elasticities across regions, a result not yet addressed by the related literature. By means of a panel with monthly data at the state level, we estimate an econometric model with instrumental variables to control endogeneity. We found that the demand is more elastic in poorer states and in regions whose relative price is closer to 70%, the technical rate of substitution between ethanol and gasoline, which is expected to trigger the demand decision of owners of flex-fuel vehicles. Those regions present higher demand price-elasticity, for ultimately logistic and tributary reasons, that determines relative prices. Results differ from those from Salvo and Huse (2013), since our model explain regional differences that do not need to rely on consumer preference heterogeneity, but occur because of logistics and income regional distribution. Our findings suggest implications for taxation and logistic infrastructure policies, which directly affect the relative prices of ethanol and gasoline, and, therefore, indirectly influence the demand elasticity.

Suggested Citation

  • Orellano, Veronica Fernandez & Souza, Alberto De Nes de & Azevedo, Paulo Furquim de, 2013. "Elasticidade-preço da Demanda por Etanol no Brasil: como renda e preços relativos explicam diferenças entre estados," Brazilian Journal of Rural Economy and Sociology (Revista de Economia e Sociologia Rural-RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 51(4), pages 1-20, December.
    • Handle: RePEc:ags:rdecag:184548
    DOI: 10.22004/ag.econ.184548
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    Cited by:

    1. Pessoa, Joao Paulo & Santos, Roberto Amaral & Chimeli, Ariaster, 2023. "Natural Gas Vehicles: Consequences to Fuel Markets and the Environment," SocArXiv 7tvgy, Center for Open Science.
    2. Guedes, Gilvan & Magalhaes, Aline & Curran, Sara & Domingues, Edson, 2018. "Greening the Brazilian energy grid as a sustainable response to increasing consumption: how feasible and how costly?," Conference papers 332968, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Roberto Amaral-Santos & Ariaster Chimeli & Joao Paulo Pessoa, 2023. "Natural Gas Vehicles: Consequences to Fuel Markets and the Environment," Working Papers, Department of Economics 2023_07, University of São Paulo (FEA-USP).
    4. Rodrigues, Luciano & Bacchi, Mirian Rumenos Piedade, 2017. "Analyzing light fuel demand elasticities in Brazil using cointegration techniques," Energy Economics, Elsevier, vol. 63(C), pages 322-331.

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    Keywords

    Agribusiness;

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