The Political Economy of State Government Subsidy Adoption: The Case of Ethanol
AbstractIn this paper we examine the factors that determine the adoption of state economic development incentives in the ethanol industry. We compile data on the implementation dates for subsidies/tax credits for all states for years 1984-2007, a period that covers the complete emergence of the biofuel industry in the United States and that was characterized by the passage of a numerous of state-level subsidies and tax breaks aimed at increasing ethanol production. Using Cox proportional hazard regression analysis, we find that states are more likely to adopt ethanol subsidies when corn production is high, when corn prices are low and gasoline prices are high, when a state is affiliated with the National Corn Growers Association, when a check-off is present, and when state government is under the control of Democrats.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 33937.
Date of creation: Jun 2011
Date of revision:
ethanol; subsidies; political economy; rent seeking; proportional hazard estimation;
Find related papers by JEL classification:
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-15 (All new papers)
- NEP-POL-2011-10-15 (Positive Political Economics)
- NEP-REG-2011-10-15 (Regulation)
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