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Impact of Ethanol Blending Policies on U.S. Gasoline Prices

Author

Listed:
  • Karel Janda

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic & Department of Banking and Insurance, Faculty of Finance and Accounting, University of Economics and Business, Prague, Czech Republic)

  • Vendula Letovska

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)

  • Jan Sila

    (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic)

  • David Zilberman

    (Department of Agricultural and Resource Economics, Rausser College of Natural Resources, University of California, Berkeley, USA)

Abstract

This paper investigates the impact of ethanol blending mandates on retail fuel prices in the United States. It uses the modifications of three microeconomics models - partial equilibrium theoretical model by de Gorter and Just, partial equilibrium simulation model of Drabik et al. and Wu and Langpap general equilibrium model - on historical data from 2009 to 2022 and predictive data from 2023 to 2030, sourced from the U.S. Energy Information Administration (EIA) and the United States Department of Agriculture (USDA), to simulate scenarios involving various ethanol blend rates. The findings reject the hypothesis that increasing ethanol blend rates always lead to higher fuel prices.

Suggested Citation

  • Karel Janda & Vendula Letovska & Jan Sila & David Zilberman, 2024. "Impact of Ethanol Blending Policies on U.S. Gasoline Prices," Working Papers IES 2024/32, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Sep 2024.
    • Handle: RePEc:fau:wpaper:wp2024_32
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    More about this item

    Keywords

    biofuels; ethanol; fuel prices; renewable fuel standard;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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