NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Demand for Ethanol as a Gasoline Substitute

Soren T. Anderson

NBER Working Paper No. 16371
Issued in September 2010
NBER Program(s):   EEE

This paper estimates household preferences for ethanol as a gasoline substitute. I develop a theoretical model linking the shape of the ethanol demand curve to the distribution of price ratios at which individual households switch fuels. I estimate the model using data from many retail fueling stations. Demand is price-sensitive with a mean elasticity of 2.5-3.5. I find that preferences are heterogeneous with many households willing to pay a premium for ethanol. This reduces the simulated cost of an ethanol content standard, since some households choose ethanol without large subsidies; simulated costs are still high relative to likely environmental benefits.

download in pdf format
   (1836 K)

email paper

This paper is available as PDF (1836 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w16371

Published: 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. citation courtesy of

Users who downloaded this paper also downloaded these:
Anderson, Fischer, Parry, and Sallee w16370 Automobile Fuel Economy Standards: Impacts, Efficiency, and Alternatives
Roberts and Schlenker w15921 Identifying Supply and Demand Elasticities of Agricultural Commodities: Implications for the US Ethanol Mandate
Chen, Huang, Khanna, and Onal w16697 Meeting the Mandate for Biofuels: Implications for Land Use, Food and Fuel Prices
Hughes, Knittel, and Sperling w12530 Evidence of a Shift in the Short-Run Price Elasticity of Gasoline Demand
Hertel and Beckman w16824 Commodity Price Volatility in the Biofuel Era: An Examination of the Linkage Between Energy and Agricultural Markets
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us