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Abstract(s)
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 (DFA). The degree
of correlation is also evaluated through the detrended cross-correlation analysis (DCCA) 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 DCCA with sliding windows was recently proposed and we also evaluate
DFA 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.
Description
Keywords
ethanol-gasoline relative price Hurst cross-correlation fuel retail market biofuel policy
Citation
Publisher
MDPI