Who Did the Ethanol Tax Credit Benefit? An Event Analysis of Subsidy Incidence

David A. Bielen, Richard Newell and William Pizer

No 21968, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using commodity futures contract and spot prices, we estimate the incidence of the US ethanol subsidy accruing to corn farmers, ethanol producers, gasoline blenders, and gasoline consumers at expiration in 2011. We find compelling evidence that ethanol producers captured two-thirds of the subsidy, and suggestive evidence that a small portion of this benefit accrued to corn farmers. The remaining one-third appears to have been captured by blenders, as we find no evidence that oil refiners or gasoline consumers captured any part of the subsidy. This paper contributes to understanding of biofuels markets and policy and empirical estimation of economic incidence.

JEL-codes: H22 Q11 Q41 Q42 Q48 (search for similar items in EconPapers)
Date: 2016-02
New Economics Papers: this item is included in nep-agr and nep-ene
Note: EEE IO PE
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Citations: View citations in EconPapers (7)

Published as David A. Bielen & Richard G. Newell & William A. Pizer, 2018. "Who did the ethanol tax credit benefit? An event analysis of subsidy incidence," Journal of Public Economics, vol 161, pages 1-14.

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Journal Article: Who did the ethanol tax credit benefit? An event analysis of subsidy incidence (2018)
Working Paper: Who Did the Ethanol Tax Credit Benefit? An Event Analysis of Subsidy Incidence (2018)
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