Working Paper: NBER ID: w21968
Authors: David A. Bielen; Richard G. Newell; William A. Pizer
Abstract: Using commodity futures contract and spot prices, we estimate the incidence of the US ethanol subsidy accruing to corn farmers, ethanol producers, gasoline blenders, and gasoline consumers at expiration in 2011. We find compelling evidence that ethanol producers captured two-thirds of the subsidy, and suggestive evidence that a small portion of this benefit accrued to corn farmers. The remaining one-third appears to have been captured by blenders, as we find no evidence that oil refiners or gasoline consumers captured any part of the subsidy. This paper contributes to understanding of biofuels markets and policy and empirical estimation of economic incidence.
Keywords: No keywords provided
JEL Codes: H22; Q11; Q41; Q42; Q48
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Ethanol subsidy (Q42) | Ethanol producers (L66) |
| Ethanol subsidy (Q42) | Corn prices (Q11) |
| Ethanol subsidy (Q42) | Fuel blenders (L71) |
| Ethanol subsidy (Q42) | Gasoline prices (L90) |