Modelling ethanol production in simultaneous equations model of global food demand and supply
|Author:||Bc. Miroslav Kozák|
|Year:||2022 - summer|
|Leaders:|| Vít Macháček
|Work type:|| Bachelors
|Awards and prizes:|
|Abstract:||This thesis conducts an econometric analysis for the relationship between food
price and ethanol production. A system of simultaneous equation models for
the demand and supply for food are estimated, paying attention to the effect
of ethanol production. The two-stage and three-stage least-squares estimation
methods are adopted, which explicitly account for endogeneity in the system.
Using annual data from 1981 to 2020, it is found that the ethanol production
has little economic impact on food price. This may be closely related with
inelastic demand and supply with respect to price that have been found in this
study, where exogenous shocks such as an increase of ethanol production may
have small effects on price.