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Vegetable Spirits and Energy Policy


  • Charles Towe
  • Constant I. Tra


This study investigates the extent to which the 2005 Energy Policy Act, specifically the ethanol mandate, contributed to the rise in farmland values. We use the location of new ethanol plants to identify the capitalization effect of the mandate by these spatially advantaged operations. We use a difference-in-difference propensity score matching estimator to control for the non-random selection of ethanol production facilities. The empirical strategy uses farmland parcel values from the 2001--7 June Agriculture Survey. We find that new ethanol facilities had no effect on nearby farmland values prior to the mandate but had statistically significant effects after the policy. Copyright 2013, Oxford University Press.

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  • Charles Towe & Constant I. Tra, 2013. "Vegetable Spirits and Energy Policy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(1), pages 1-16.
  • Handle: RePEc:oup:ajagec:v:95:y:2013:i:1:p:1-16

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    References listed on IDEAS

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    8. Bicknell, Kathryn & Wilen, James E. & Howitt, Richard E., 1999. "Public policy and private incentives for livestock disease control," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 43(4), December.
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    Cited by:

    1. Ifft, Jennifer & Rajagopal, Deepak & Ryan, Weldzius, 2016. "The effect of the ethanol mandate on the Conservation Reserve Program," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236178, Agricultural and Applied Economics Association.
    2. Buchanan, Kathryn & Russo, Riccardo & Anderson, Ben, 2015. "The question of energy reduction: The problem(s) with feedback," Energy Policy, Elsevier, vol. 77(C), pages 89-96.
    3. Ifft, Jennifer & Wu, Shang & Kuethe, Todd, 2014. "The Impact of Pasture Insurance on Farmland Values," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 43(3), December.
    4. Kuethe, Todd H. & Walsh, Nicholas & Ifft, Jennifer, 2013. "Farmland versus Alternative Investments Before and After the 2008 Financial Crisis," Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers.
    5. Hendricks, Nathan P. & Sinnathamby, Sumathy & Douglas-Mankin, Kyle & Smith, Aaron & Sumner, Daniel A. & Earnhart, Dietrich H., 2014. "The environmental effects of crop price increases: Nitrogen losses in the U.S. Corn Belt," Journal of Environmental Economics and Management, Elsevier, vol. 68(3), pages 507-526.
    6. Czyżewski, Bazyli & Trojanek, Radosław, 0. "Drivers of agricultural land prices in terms of different functions of rural areas in Poland," Problems of Agricultural Economics, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).

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