Sayeed Mehmood, University of Arkansas, firstname.lastname@example.org (Presenter)
Krishna Koirala, School of Forest resources, email@example.com
Volatile nature of nonrenewable energy prices, especially oil prices, has contributed to the recent interest in wood-based energy in the United States. A study of price relationships between wood and other energy sources is therefore important to investigate wood-based energy pricing and associated market dynamics. The specific objective of this study is to investigate whether there are long run relationships between prices of woody biomass, coal, natural gas, and gasoline. Furthermore, we also derive short-run estimates of price transmission elasticities of woody biomass in relation to prices of other energy sources. Seven states from different regions were selected for this study. Co-integration and Vector Error Correction Model were used to study time series data. Results suggest that there is co-integration between different energy prices in the long run. Wood energy price is strongly influenced by LPG price, and moderately influenced by gasoline price. Biomass prices show positive effect with changes in natural gas prices and a negative relationship with changes in coal prices.