Eur. Phys. J. B (2013) 86: 40
https://doi.org/10.1140/epjb/e2012-30871-9

Regular Article

Regime-dependent topological properties of biofuels networks

¹ Institute of Information Theory and Automation, Academy of Sciences of the Czech Republic, Pod Vodarenskou Vezi 4, 182 08 Prague, Czech Republic
² Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Opletalova 26, 110 00 Prague, Czech Republic
³ Department of Banking and Insurance, Faculty of Finance and Accounting, University of Economics, Prague, Namesti Winstona Churchilla 4, 130 67 Prague, Czech Republic
⁴ Department of Agricultural and Resource Economics, University of California, 207 Giannini Hall, Berkeley, 94720 California, USA

^a e-mail: kristoufek@ies-prague.org

Received: 24 September 2012
Received in final form: 5 November 2012
Published online: 6 February 2013

Abstract

In this paper, we analyze the relationships between biodiesel, ethanol and related fuels and agricultural commodities with a use of minimal spanning trees and hierarchical trees. To distinguish between short term and long term effects, we construct the trees for different frequencies (weekly, monthly and quarterly). At lower frequencies, the system splits into two well separated branches – a fuels part and a food part. Biodiesel tends to the fuels branch and ethanol to the food branch. We especially concentrate on the links and comovements between the commodities for different stages of the market based on the level of prices of important commodities or groups of commodities. Such approach uncovers some more interesting results and, in general, confirms the separation of network into fuels and food for majority of analyzed cases.