Relative Prices of Ethanol-Gasoline in the Major Brazilian Capitals: An Analysis to Support Public Policies
The use of biomass as an energy source has advanced in recent decades, given the scientific evidence that it is a solution to the environmental problems faced globally. In this context, biofuels derived from biomass have a prominent role. Among the countries where this alternative is the most promis...
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MDPI AG
2022-06-01
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| Online Access: | https://www.mdpi.com/1996-1073/15/13/4795 |
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| author | Derick David Quintino Heloisa Lee Burnquist Paulo Ferreira |
| author_facet | Derick David Quintino Heloisa Lee Burnquist Paulo Ferreira |
| author_sort | Derick David Quintino |
| collection | DOAJ |
| description | The use of biomass as an energy source has advanced in recent decades, given the scientific evidence that it is a solution to the environmental problems faced globally. In this context, biofuels derived from biomass have a prominent role. Among the countries where this alternative is the most promising, Brazil stands out, just behind the USA. It is, therefore, necessary to assess whether such a replacement is economically viable. For such an assessment, the behavior of the relative price of bioethanol/gasoline is crucial. In the present work, the degree of temporal persistence of relative prices, considering the existence of shocks to which they are exposed, is evaluated, considering 15 important Brazilian capitals, via the detrended fluctuation analysis (<inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>D</mi><mi>F</mi><mi>A</mi></mrow></semantics></math></inline-formula>). The degree of correlation is also evaluated through the detrended cross-correlation analysis (<inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>D</mi><mi>C</mi><mi>C</mi><mi>A</mi></mrow></semantics></math></inline-formula>) between fuel prices in São Paulo, the capital of the most populous state and main producer of bioethanol, with the capitals of the 14 states selected for the analysis. The period of analysis takes place between 2004 and 2020. The use of <inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>D</mi><mi>C</mi><mi>C</mi><mi>A</mi></mrow></semantics></math></inline-formula> with sliding windows was recently proposed and we also evaluate <inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>D</mi><mi>F</mi><mi>A</mi></mrow></semantics></math></inline-formula> dynamically in this way, and this, together with an extended sample in the context of Brazilian fuel prices, represents the main innovations of the present work. We found that the degree of persistence varies significantly depending on the capitals analyzed, which means that price variations are localized and demand regional stimulus policies. Furthermore, it was found that the correlation with São Paulo is less intense in the most geographically distant capitals. Such evidence is important and complementary to infer how integrated the national bioethanol market is, in order to support public policies aimed at its consolidation. |
| first_indexed | 2024-03-09T21:56:14Z |
| format | Article |
| id | doaj.art-edc41479f95e43d78e7d93203f23a8f0 |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-03-09T21:56:14Z |
| publishDate | 2022-06-01 |
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| spelling | doaj.art-edc41479f95e43d78e7d93203f23a8f02023-11-23T19:57:29ZengMDPI AGEnergies1996-10732022-06-011513479510.3390/en15134795Relative Prices of Ethanol-Gasoline in the Major Brazilian Capitals: An Analysis to Support Public PoliciesDerick David Quintino0Heloisa Lee Burnquist1Paulo Ferreira2Department of Economics, Administration and Sociology, University of São Paulo, Piracicaba 13418-900, SP, BrazilDepartment of Economics, Administration and Sociology, University of São Paulo, Piracicaba 13418-900, SP, BrazilVALORIZA—Research Center for Endogenous Resource Valorization, 7300-555 Portalegre, PortugalThe use of biomass as an energy source has advanced in recent decades, given the scientific evidence that it is a solution to the environmental problems faced globally. In this context, biofuels derived from biomass have a prominent role. Among the countries where this alternative is the most promising, Brazil stands out, just behind the USA. It is, therefore, necessary to assess whether such a replacement is economically viable. For such an assessment, the behavior of the relative price of bioethanol/gasoline is crucial. In the present work, the degree of temporal persistence of relative prices, considering the existence of shocks to which they are exposed, is evaluated, considering 15 important Brazilian capitals, via the detrended fluctuation analysis (<inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>D</mi><mi>F</mi><mi>A</mi></mrow></semantics></math></inline-formula>). The degree of correlation is also evaluated through the detrended cross-correlation analysis (<inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>D</mi><mi>C</mi><mi>C</mi><mi>A</mi></mrow></semantics></math></inline-formula>) between fuel prices in São Paulo, the capital of the most populous state and main producer of bioethanol, with the capitals of the 14 states selected for the analysis. The period of analysis takes place between 2004 and 2020. The use of <inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>D</mi><mi>C</mi><mi>C</mi><mi>A</mi></mrow></semantics></math></inline-formula> with sliding windows was recently proposed and we also evaluate <inline-formula><math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><mrow><mi>D</mi><mi>F</mi><mi>A</mi></mrow></semantics></math></inline-formula> dynamically in this way, and this, together with an extended sample in the context of Brazilian fuel prices, represents the main innovations of the present work. We found that the degree of persistence varies significantly depending on the capitals analyzed, which means that price variations are localized and demand regional stimulus policies. Furthermore, it was found that the correlation with São Paulo is less intense in the most geographically distant capitals. Such evidence is important and complementary to infer how integrated the national bioethanol market is, in order to support public policies aimed at its consolidation.https://www.mdpi.com/1996-1073/15/13/4795ethanol-gasoline relative priceHurstcross-correlationfuel retail marketbiofuel policy |
| spellingShingle | Derick David Quintino Heloisa Lee Burnquist Paulo Ferreira Relative Prices of Ethanol-Gasoline in the Major Brazilian Capitals: An Analysis to Support Public Policies Energies ethanol-gasoline relative price Hurst cross-correlation fuel retail market biofuel policy |
| title | Relative Prices of Ethanol-Gasoline in the Major Brazilian Capitals: An Analysis to Support Public Policies |
| title_full | Relative Prices of Ethanol-Gasoline in the Major Brazilian Capitals: An Analysis to Support Public Policies |
| title_fullStr | Relative Prices of Ethanol-Gasoline in the Major Brazilian Capitals: An Analysis to Support Public Policies |
| title_full_unstemmed | Relative Prices of Ethanol-Gasoline in the Major Brazilian Capitals: An Analysis to Support Public Policies |
| title_short | Relative Prices of Ethanol-Gasoline in the Major Brazilian Capitals: An Analysis to Support Public Policies |
| title_sort | relative prices of ethanol gasoline in the major brazilian capitals an analysis to support public policies |
| topic | ethanol-gasoline relative price Hurst cross-correlation fuel retail market biofuel policy |
| url | https://www.mdpi.com/1996-1073/15/13/4795 |
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