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

Jarrett Whistance and Wyatt Thompson

Applied Economic Perspectives and Policy, 2014, vol. 36, issue 4, 623-642

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.

Date: 2014
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