Dynamic bioethanol price pass-through:implication for food security - Archive ouverte HAL
Preprints, Working Papers, ... Year : 2024

Dynamic bioethanol price pass-through:implication for food security

Abstract

This paper analyzes the pass-through dynamics of world bioethanol price shocks to food prices, particularly maize prices, for a set of developing and developed countries, over the period 2000-2014. Using local projections, a method robust to the risk of misspecification that allows us to generate multi-step predictions, we estimate the dynamic responses at each period of interest. Our results show that there is a positive response of maize prices to bioethanol price shocks. On the whole sample, the impulse response function displays that a one percent increase in bioethanol prices per liter contributes to around 50 percent rise in maize price two years after the shock. Besides, on average, the asymmetry concerning the magnitude of shocks indicates that high magnitude shocks impact is more important than low magnitude shocks; however, asymmetry with respect to shocks direction reveals a nil net effect, suggesting that bioethanol is not harmful to food security. Finally, the intensity of these impacts is subject to heterogeneity related to many factors: income level, trade openness, exchange rate regime, maize production, net maize trade, or the role of public policies.
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Aicha Lucie Sanou. Dynamic bioethanol price pass-through:implication for food security. 2024. ⟨hal-04446534⟩
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