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Does the US have Market Power in Importing Ethanol from Brazil?

Sunil Dhoubhadel, Azzeddine Azzam and Matthew Stockton ()

No 169543, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: Increasing requirements in the US to blend higher volumes of advanced biofuels with gasoline has increased the importance of imports of sugarcane-based ethanol from Brazil. Using the residual supply approach we test for oligopsony power of US importers in importing ethanol from Brazil. The residual supply elasticity is found to be highly elastic and positive indicating a small degree of market power. The result implies that the US importers are operating as oligopsony with respect to ethanol imports from Brazil and further restricting ethanol imports would reduce welfare of US importers.

Keywords: Industrial Organization; International Relations/Trade; Livestock Production/Industries (search for similar items in EconPapers)
Pages: 29
Date: 2014
New Economics Papers: this item is included in nep-lam
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:169543

DOI: 10.22004/ag.econ.169543

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