Biodiesel profitability and linkages to the soybean oil market

This thesis investigates the relationship between soybean oil and biodiesel markets in the US through a structural model and a time-series econometric model. A conceptual link is built based on the theories of market efficiencies and implications of a binding mandate on supply and demand. We hypothesize that a long run zero-profit relationship governs the biodiesel and soybean oil pricing relationships. We test for this using a structural model based on an Iowa biodiesel plant. We additionally use formal time series testing including Johansen Trace test and a vector error correction model and the Kejriwal and Perron test. We find that under certain policy conditions our hypothesis holds but not throughout the sample studied.

Name thesis:degree_name

M.S.

Level thesis:degree_level

Thesis

Discipline thesis:degree_discipline

Agricultural & Applied Econ

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2013

Author dc:creator

• Zahran, Hala

Contributors dc:contributor

• Irwin, Scott H.

• Biodiesel
• Mandate
• vector error correction model
• long run equilibrium
• zero profit relationship

Statement dc:rights

• Copyright 2013 Hala Zahran

Language dc:language

en

Handle dc:identifier

http://hdl.handle.net/2142/45274

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/45274