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Impact of Ethanol Production on U.S. and Regional Gasoline Markets: An Update to 2012, The

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We update the findings of the impact of ethanol production on U.S. and regional gasoline markets as reported previously in Du and Hayes (2009 and 2011), by extending the data to December 2011. The results indicate that over the period of January 2000 to December 2011, the growth in ethanol production reduced wholesale gasoline prices by $0.29 per gallon on average across all regions. The Midwest region experienced the biggest negative impact of $0.45/gallon, while the regions of East Coast, West Coast, and Gulf Coast experienced negative impacts of similar magnitudes around $0.20/gallon. Based on the data of 2011 only, the marginal impacts on gasoline prices are found to be substantially higher given the increasing ethanol production and higher crude oil prices. The average effect across all regions increases to $1.09/gallon and the regional impact ranges from $0.73/gallon in the Gulf Coast to $1.69/gallon in the Midwest.

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  • Xiaodong Du & Dermot J. Hayes, 2012. "Impact of Ethanol Production on U.S. and Regional Gasoline Markets: An Update to 2012, The," Food and Agricultural Policy Research Institute (FAPRI) Publications 12-wp528, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
  • Handle: RePEc:ias:fpaper:12-wp528
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    1. Robert G. Chambers & John Quiggin, 2003. "Price Stabilization and the Risk-Averse Firm," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 336-347.
    2. Chavas, Jean-Paul, 1993. "The Ricardian Rent and the Allocation of Land under Uncertainty," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 20(4), pages 451-469.
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    Cited by:

    1. Koto, Prosper Senyo, 2015. "Are retail prices of ethanol, gasoline and natural gas in the midwest cointegrated? An asymmetric threshold cointegration analysis," Journal of Economics and Business, Elsevier, pages 79-93.

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