A Graphical and Beta Analysis of the Effect of Increased Ethanol Production on the Volatility of Corn Prices

Authors

  • Frank Tenkorang University of Nebraska at Kearney
  • Deborah Bridges

DOI:

https://doi.org/10.15173/esr.v26i1.5599

Abstract

Increased demand for corn-based ethanol puts upward pressure on prices of corn and other commodities, such as soybeans, and possibly worsens their price volatility. The paper investigates the changes in agricultural commodities' standard deviation and beta sizes due to ethanol production in the US. Standard deviations and beta estimations are compared for the ethanol pre-expansion and expansion periods. The results indicate a high level of price volatility in the second period, which could be attributed to ethanol expansion.

Author Biography

Frank Tenkorang, University of Nebraska at Kearney

Department of Economics
Associate Professor

Published

2024-08-12