The economics of biofuel policy and biotechnology

Gal Hochman, Steven E. Sexton, David D. Zilberman

Research output: Contribution to journalArticlepeer-review

38 Scopus citations

Abstract

This paper employs a partial equilibrium trade framework to show that biofuel policy can substitute for traditional agricultural policy intended to boost farm welfare. It also shows how food market volatility can induce periods of boom and bust in the ethanol industry, causing episodes of bankruptcy and reduced capital investment. This paper further models the effects of two specific technological innovations - cellulosic ethanol and agricultural biotechnology - on food and fuel markets and demonstrates that technology can reduce ethanol market volatility. A parameterized model is used to characterize the impacts of biofuels on food and fuel markets.

Original languageEnglish (US)
Article number8
JournalJournal of Agricultural and Food Industrial Organization
Volume6
Issue number2
DOIs
StatePublished - 2008
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Food Science
  • Business, Management and Accounting(all)
  • Economics and Econometrics

Keywords

  • Biofuels
  • Biotechnology
  • Policy

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