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The impact of ethanol production on US and regional gasoline markets

Listed author(s):
  • Du, Xiaodong
  • Hayes, Dermot J.

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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File URL: http://lib.dr.iastate.edu/cgi/viewcontent.cgi?article=1547&context=card_workingpapers
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Paper provided by Iowa State University, Department of Economics in its series ISU General Staff Papers with number 200908010700001547.

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Date of creation: 01 Aug 2009
Handle: RePEc:isu:genstf:200908010700001547
Contact details of provider: Postal:
Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070

Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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