The Political Economy of State Government Subsidy Adoption: The Case of Ethanol

Skidmore Mark, Chad Cotti and James Alm ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we examine the factors that determine the adoption of state economic development incentives in the ethanol industry. We compile data on the implementation dates for subsidies/tax credits for all states for years 1984-2007, a period that covers the complete emergence of the biofuel industry in the United States and that was characterized by the passage of a numerous of state-level subsidies and tax breaks aimed at increasing ethanol production. Using Cox proportional hazard regression analysis, we find that states are more likely to adopt ethanol subsidies when corn production is high, when corn prices are low and gasoline prices are high, when a state is affiliated with the National Corn Growers Association, when a check-off is present, and when state government is under the control of Democrats.

Keywords: ethanol; subsidies; political economy; rent seeking; proportional hazard estimation (search for similar items in EconPapers)
JEL-codes: H25 H71 (search for similar items in EconPapers)
Date: 2011-06
New Economics Papers: this item is included in nep-pol and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The Political Economy of State Government Subsidy Adoption: The Case of Ethanol (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:33937

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