Demand for light fuels in Brazil: an approach using spatial panel data models

Leonardo C B Cardoso,Maurício V L Bittencourt,Alexandre A Porsse

doi:10.1590/0103-6351/4327

Leonardo C B Cardoso, Maurício V L Bittencourt + Show 1 more

Open Access

https://doi.org/10.1590/0103-6351/4327

Copy DOI

Abstract

Abstract The need for changes in the current energy matrix is a reality due to the possibility of a shortage of fossil fuels and the environmental damage caused by emissions related to fossil fuel use. The correct prescription of public policies for energy markets depends on the knowledge of demand elasticities. Hence, the aim of this work was to estimate the main determinants of light fuel demands in Brazil. Dynamic and non-dynamic estimators were used, and the results indicated that both demands respond more to changes in gasoline prices than changes in ethanol prices. Therefore, public policies that aim to change consumption patterns should focus on gasoline prices.

Highlights

The need for changes in the current energy matrix is a reality due to both the shortage of oil and the emissions caused by fossil fuel use
When looking at future increases in the demand for light fuels, the results indicate that, ceteris paribus, increases in the number of vehicles or in income have a greater effect on the ethanol demand than the gasoline demand
Ferent procedures were carried out: GLS with AR(1) and estimators for cross-sectional dependence (CD) correction, which is efficient whenever there is CD, and a spatial queen matrix (W), which makes it possible to capture non-observed effects that are responsible for such dependence

Summary

Introduction

The need for changes in the current energy matrix is a reality due to both the shortage of oil and the emissions caused by fossil fuel use. Even though the reserves-to-production ratio (R/P) has increased in the last years, in the medium and long terms, matrix diversity is still necessary. This first paragraph could have been written ten or twenty years ago with little adjustment to the percentages, so why did the new technologies take so long to attain larger shares of the energy market? Some may present technology viability; their production is not economically viable due to high costs.

Objectives

Results

Conclusion