Léo da Rocha Ferreira

The Brazilian national alcohol programme: An economic reappraisal and adjustments

Abstract The recent economic reappraisal presented in this study shows that the social viability of ethanol production in Brazil will only became a reality with considerable increases in productivity and with international oil prices above US

Evaluating the economy embedded in the Brazilian ethanol–gasoline flex-fuel car: a Real Options approach

30.00, factors which are only likely to come about at the end of the 1990s. However, if one accepts that the investments already undertaken in the alcohol production sector, can be considered as sunk costs, then the prospect of viability is not so remote, and perfectly feasible with oil prices in the US

Avaliação da opção de troca de combustível no ­carro brasileiro flex: um estudo por região geográfica ­usando teoria de opções reais e simulação estocástica

15–20 range. The adjustment on fiscal policy discussed here is designed precisely to guarantee the continuation of PROALCOOL, with the production of alcohol limited to the sectors current capacity. In other words, its purpose is to achieve an evolution in the demand for alcohol so as to ensure compatibility with the supply derived from investments already undertaken in the sector, through, basically, an increase in tax on alcohol car sales.

Labor Legislation and its Adverse Impacts on Transaction Costs in Brazilian Agriculture

The introduction of the flex-fuel cars in the Brazilian market in 2003 changed considerably the consumer decision-making process. Prior to this date, it was necessary to choose the automobile type only by gasoline or by ethanol fuel; today it is possible to choose a car type with both fuel options. This flexibility generates economic advantages for his owner, but what are the financial benefits of a flex-fuel car in comparison with a car using only gasoline? Geographically, where is the owner of the benefits from this flexibility located? This article presents an empirical application of the Real Options Theory in the analysis of the flex-fuel car option for five geographic Brazilian regions: Northern, Northeastern, Central-Western, Southeastern and Southern. The regional price differences as well as the consumer preferences of these regions were met. For this purpose, historical fuel prices were considered stochastic and following a Mean Reverting Stochastic process. The prediction and option values were generated by a Monte Carlo simulation. The results indicated that the option embedded on the Brazilian flex-fuel car adds considerable value to the owner in all regions and car models considered, with the Southeastern Region receiving most benefits by the flex option.

Taxa de câmbio social e abertura comercial

The introduction of the flex-fuel car to the Brazilian market in 2003 considerably changed the consumer decision making process. Previously, it was necessary to choose the automobile type, and then the market moved to only gasoline or only sugarcane ethanol; currently, it is possible to choose a car that can run with a combination of these fuels. This flexibility generates economic advantages for the owner, but what are the financial benefits of flex-fuel technology? Geographically, where must the owner be located to have this flexibility? The present paper empirically applies the real options theory to an analysis of the options embedded in the flex-fuel car for five Brazilian geographic regions. The regional price differences and the consumer preferences within these regions were analyzed. For this purpose, historical fuel prices were considered to be stochastic, thus following mean reverting stochastic processes. Price forecasts and option values were generated by Monte Carlo simulation. The results indicated that the option to choose the most inexpensive fuel adds considerable value for the flex-fuel car owner in all regions and car models considered, with the southern region seeing the greatest benefit in the flex option.

Reavaliação econômica e novos ajustamentos do Proálcool

The objective of this paper is to analyze the inadequate pattern of labor absorption in Brazilian agriculture, focusing, specially, on the role of agricultural labor policy. While pointing out the negative role-played by the so -called “labor surcharges”, the paper gives more emphasis on the “transaction costs” associated to this policy, arguing that these “transaction costs” are more important than the “labor surcharges”. Finally, in order to allow for much freer contracting among the several parties involved in such an agricultural labor market, it is proposed a radical change in the current agricultural labor policy. However, this does not mean that the public sector should leave this labor market altogether; after all, public regulation is necessary for the enforcement of the contracts.

Asymmetric volatility modeling of spot prices of arabic coffee in Brazil

The purpose of this paper is to analyze the impact of the trade liberalization process on social exchange rates in Brazil. The main objective is to develop and estimate an appropriate measure for the social exchange rates to be used in the evaluation of investment projects in Brazil. Using an opportunity cost for foreign exchange model to estimate the social exchange rates, the study concludes that there were no important modifications in the ranking of economic activities according to the rates of effective protection. The impact of the trade liberalization process and the change in exchange rate policy regime will only be fully measured in the medium and long run. However, an indication of its effects on the social exchange rates can clearly be observed by the declining tendency of the social exchange rates.