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A Critical Assessment of RIN Price Behavior and the Implications for Corn, Ethanol, and Gasoline Price Relationships

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  • Jarrett Whistance
  • Wyatt Thompson

Abstract

This study observationally and statistically assesses theories put forth regarding expected price behavior of Renewable Identification Numbers (RINs) using a dataset of daily RIN price observations from January 2009 through May 2013. RIN price behavior tends to follow theoretical expectations, but some notable exceptions occur, the causes of which remain uncertain. Information provided by RIN prices is used to test the implications of a binding renewable fuel standard (RFS) versus a nonbinding RFS on ethanol-gasoline and corn-gasoline price relationships. In certain cases, cointegration tests provide evidence that the relationships are weaker when the RFS mandates are believed to be binding.

Suggested Citation

  • Jarrett Whistance & Wyatt Thompson, 2014. "A Critical Assessment of RIN Price Behavior and the Implications for Corn, Ethanol, and Gasoline Price Relationships," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 36(4), pages 623-642.
    • Handle: RePEc:oup:apecpp:v:36:y:2014:i:4:p:623-642.
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    File URL: http://hdl.handle.net/10.1093/aepp/ppu012
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    Cited by:

    1. Whistance, Jarrett & Ripplinger, David & Thompson, Wyatt, 2016. "Biofuel-related price transmission using Renewable Identification Number prices to signal mandate regime," Energy Economics, Elsevier, vol. 55(C), pages 19-29.
    2. An, Henry & Qiu, Feng & Rude, James, 2021. "Volatility spillovers between food and fuel markets: Do administrative regulations affect the transmission?," Economic Modelling, Elsevier, vol. 102(C).
    3. Karel Janda & Eva Michalikova & Luiz Célio Souza Rocha & Paulo Rotella Junior & Barbora Schererova & David Zilberman, 2022. "Review of the Impact of Biofuels on U.S. Retail Gasoline Prices," Energies, MDPI, vol. 16(1), pages 1-21, December.
    4. Mason, Charles F. & Wilmot, Neil A., 2016. "Price discontinuities in the market for RINs," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 79-97.
    5. Thompson, Wyatt & Johansson, Robert & Meyer, Seth & Whistance, Jarrett, 2018. "The US biofuel mandate as a substitute for carbon cap-and-trade," Energy Policy, Elsevier, vol. 113(C), pages 368-375.
    6. Korting, Christina & Just, David R., 2017. "Demystifying RINs: A partial equilibrium model of U.S. biofuel markets," Energy Economics, Elsevier, vol. 64(C), pages 353-362.
    7. Christensen, Adam & Hobbs, Benjamin, 2016. "A model of state and federal biofuel policy: Feasibility assessment of the California Low Carbon Fuel Standard," Applied Energy, Elsevier, vol. 169(C), pages 799-812.
    8. Christensen, Adam & Siddiqui, Sauleh, 2015. "Fuel price impacts and compliance costs associated with the Renewable Fuel Standard (RFS)," Energy Policy, Elsevier, vol. 86(C), pages 614-624.
    9. Whistance, Jarrett & Thompson, Wyatt & Meyer, Seth, 2017. "Interactions between California's Low Carbon Fuel Standard and the National Renewable Fuel Standard," Energy Policy, Elsevier, vol. 101(C), pages 447-455.
    10. Debnath, Deepayan & Whistance, Jarrett & Thompson, Wyatt & Binfield, Julian, 2017. "Complement or substitute: Ethanol’s uncertain relationship with gasoline under alternative petroleum price and policy scenarios," Applied Energy, Elsevier, vol. 191(C), pages 385-397.

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