A Welfare Analysis of the U.S. Ethanol Subsidy

Xiaodong Du (), Dermot Hayes and Mindy Mallory ()

Review of Agricultural Economics, 2009, vol. 31, issue 4, 669-676

Abstract: Based on an analytical model of multiple interconnected markets including corn, ethanol, gasoline, and transportation fuel, this study estimates the welfare changes for consumers and producers resulting from ethanol production and related support polices in 2007. The welfare estimation takes into account the fact that the ethanol program was implemented in a market that had already been distorted by other programs. The results suggest a total social cost of about $0.89 billion for given market parameters. We validate the model's underlying assumption and test for the results' sensitivity to assumed parameters. Copyright 2009 Agricultural and Applied Economics Association

Date: 2009
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Related works:
Working Paper: A Welfare Analysis of the U.S. Ethanol Subsidy (2010)
Journal Article: A Welfare Analysis of the U.S. Ethanol Subsidy (2009)
Working Paper: A Welfare Analysis of the U.S. Ethanol Subsidy (2009)
Working Paper: Welfare Analysis of the U.S. Ethanol Subsidy, A (2008)
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