IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v38y2013icp128-135.html
   My bibliography  Save this article

Spatiotemporal analysis of ethanol market penetration

Author

Listed:
  • Du, Xiaodong
  • Carriquiry, Miguel A.

Abstract

Consumption of ethanol in the United States has increased rapidly over the last few years, fueled by both higher crude oil prices and generous public support measures for renewable fuels. The contribution of ethanol to the transport energy mix varies markedly by state. Heterogeneity in ethanol adoption and market development is investigated using a hierarchical, spatiotemporal model. A Bayesian Markov chain Monte Carlo method is employed for estimation of the proposed flexible model structure. Besides spatial dependence among neighboring states, differential inclusion rates of ethanol are found to be largely determined by national- and state-level biofuel incentive policies, relative gasoline prices, feedstock availability, household median income, MTBE bans, and density of fuel retail infrastructure. Our findings imply that increasing renewable fuel support as well as investing in extending the transportation and fuel retail infrastructure can result in higher ethanol consumption.

Suggested Citation

  • Du, Xiaodong & Carriquiry, Miguel A., 2013. "Spatiotemporal analysis of ethanol market penetration," Energy Economics, Elsevier, vol. 38(C), pages 128-135.
  • Handle: RePEc:eee:eneeco:v:38:y:2013:i:c:p:128-135
    DOI: 10.1016/j.eneco.2013.03.012
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988313000613
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.eneco.2013.03.012?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Anderson, Soren T., 2012. "The demand for ethanol as a gasoline substitute," Journal of Environmental Economics and Management, Elsevier, vol. 63(2), pages 151-168.
    2. Thomas P. Lyon & Haitao Yin, 2010. "Why Do States Adopt Renewable Portfolio Standards?: An Empirical Investigation," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 133-158.
    3. Jonathan E. Hughes & Christopher R. Knittel & Daniel Sperling, 2008. "Evidence of a Shift in the Short-Run Price Elasticity of Gasoline Demand," The Energy Journal, International Association for Energy Economics, vol. 29(1), pages 113-134.
    4. Clark P. Bishop & C. Richard Shumway & Philip R. Wandschneider, 2010. "Agent Heterogeneity in Adoption of Anaerobic Digestion Technology: Integrating Economic, Diffusion, and Behavioral Innovation Theories," Land Economics, University of Wisconsin Press, vol. 86(3).
    5. Koop,Gary & Poirier,Dale J. & Tobias,Justin L., 2007. "Bayesian Econometric Methods," Cambridge Books, Cambridge University Press, number 9780521671736, June.
    6. Gallagher, Kelly Sims & Muehlegger, Erich, 2011. "Giving green to get green? Incentives and consumer adoption of hybrid vehicle technology," Journal of Environmental Economics and Management, Elsevier, vol. 61(1), pages 1-15, January.
    7. Barry K. Goodwin & Nicholas E. Piggott, 2009. "Spatiotemporal Modeling of Asian Citrus Canker Risks: Implications for Insurance and Indemnification Fund Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1038-1055.
    8. Chad Cotti & Mark Skidmore, 2010. "The Impact of State Government Subsidies and Tax Credits in an Emerging Industry: Ethanol Production 1980–2007," Southern Economic Journal, John Wiley & Sons, vol. 76(4), pages 1076-1093, April.
    9. Chan,Joshua & Koop,Gary & Poirier,Dale J. & Tobias,Justin L., 2019. "Bayesian Econometric Methods," Cambridge Books, Cambridge University Press, number 9781108423380, November.
    10. Szulczyk, Kenneth R. & McCarl, Bruce A., 2010. "Market penetration of biodiesel," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(8), pages 2426-2433, October.
    11. Duffield, James A. & Collins, Keith J., 2006. "Evolution of Renewable Energy Policy," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 21(01), pages 1-6.
    12. Corts, Kenneth S., 2010. "Building out alternative fuel retail infrastructure: Government fleet spillovers in E85," Journal of Environmental Economics and Management, Elsevier, vol. 59(3), pages 219-234, May.
    13. Paulo Albuquerque & Bart J. Bronnenberg & Charles J. Corbett, 2007. "A Spatiotemporal Analysis of the Global Diffusion of ISO 9000 and ISO 14000 Certification," Management Science, INFORMS, vol. 53(3), pages 451-468, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jiranyakul, Komain, 2022. "Ethanol Use and Gasoline Consumption in Thailand," MPRA Paper 115503, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Huse, Cristian, 2014. "Fast and Furious (and Dirty): How Asymmetric Regulation May Hinder Environmental Policy," MPRA Paper 48909, University Library of Munich, Germany.
    2. Salvo, Alberto & Huse, Cristian, 2013. "Build it, but will they come? Evidence from consumer choice between gasoline and sugarcane ethanol," Journal of Environmental Economics and Management, Elsevier, vol. 66(2), pages 251-279.
    3. Adnan Haider Bukhari & Safdar Ullah Khan, 2008. "A Small Open Economy DSGE Model for Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 963-1008.
    4. Francesco Furlanetto & Francesco Ravazzolo & Samad Sarferaz, 2019. "Identification of Financial Factors in Economic Fluctuations," The Economic Journal, Royal Economic Society, vol. 129(617), pages 311-337.
    5. Liu, De-Chih & Chang, Yu-Chien, 2022. "Systematic variations in exchange rate returns," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 569-583.
    6. Hasan, Iftekhar & Horvath, Roman & Mares, Jan, 2020. "Finance and wealth inequality," Journal of International Money and Finance, Elsevier, vol. 108(C).
    7. Obryan Poyser, 2017. "Exploring the determinants of Bitcoin's price: an application of Bayesian Structural Time Series," Papers 1706.01437, arXiv.org.
    8. Rob Luginbuhl, 2020. "Estimation of the Financial Cycle with a Rank-Reduced Multivariate State-Space Model," CPB Discussion Paper 409, CPB Netherlands Bureau for Economic Policy Analysis.
    9. Bin Jiang & Anastasios Panagiotelis & George Athanasopoulos & Rob Hyndman & Farshid Vahid, 2016. "Bayesian Rank Selection in Multivariate Regression," Monash Econometrics and Business Statistics Working Papers 6/16, Monash University, Department of Econometrics and Business Statistics.
    10. Joshua C. C. Chan, 2018. "Specification tests for time-varying parameter models with stochastic volatility," Econometric Reviews, Taylor & Francis Journals, vol. 37(8), pages 807-823, September.
    11. Baştürk, Nalan & Grassi, Stefano & Hoogerheide, Lennart & Opschoor, Anne & van Dijk, Herman K., 2017. "The R Package MitISEM: Efficient and Robust Simulation Procedures for Bayesian Inference," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 79(i01).
    12. Babatunde O. Abidoye & Joseph A. Herriges & Justin L. Tobias, 2012. "Controlling for Observed and Unobserved Site Characteristics in RUM Models of Recreation Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(5), pages 1070-1093.
    13. Knut Are Aastveit & Gisle James Natvik & Sergio Sola, 2013. "Economic uncertainty and the effectiveness of monetary policy," Working Paper 2013/17, Norges Bank.
    14. Wang, Zheqi & Crook, Jonathan & Andreeva, Galina, 2020. "Reducing estimation risk using a Bayesian posterior distribution approach: Application to stress testing mortgage loan default," European Journal of Operational Research, Elsevier, vol. 287(2), pages 725-738.
    15. Dahem, Ahlem, 2015. "Short term Bayesian inflation forecasting for Tunisia," MPRA Paper 66702, University Library of Munich, Germany.
    16. Baltagi, Badi H. & Bresson, Georges & Chaturvedi, Anoop & Lacroix, Guy, 2022. "Robust Dynamic Space-Time Panel Data Models Using ?-Contamination: An Application to Crop Yields and Climate Change," IZA Discussion Papers 15815, Institute of Labor Economics (IZA).
    17. Bernardi Mauro & Della Corte Giuseppe & Proietti Tommaso, 2011. "Extracting the Cyclical Component in Hours Worked," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 15(3), pages 1-28, May.
    18. Saqib Amin & Ruhamah Yousaf & Muhammad Awais Anwar & Noman Arshed, 2022. "Assessing the impact of diversity and ageing population on health expenditure of United States," International Journal of Health Planning and Management, Wiley Blackwell, vol. 37(2), pages 913-929, March.
    19. Luis Uzeda, 2022. "State Correlation and Forecasting: A Bayesian Approach Using Unobserved Components Models," Advances in Econometrics, in: Essays in Honour of Fabio Canova, volume 44, pages 25-53, Emerald Group Publishing Limited.
    20. Colson, Gregory, 2009. "Improving nutrient content through genetic modification: Evidence from experimental auctions on consumer acceptance and willingness to pay for intragenic foods," ISU General Staff Papers 200901010800001872, Iowa State University, Department of Economics.

    More about this item

    Keywords

    Biofuel incentive policy; Ethanol adoption; Gibbs sampler; Neighboring effect; Spatial autocorrelation;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:38:y:2013:i:c:p:128-135. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.