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Inelastic and Fragmented Farm Supply Response for Second‐generation Bioenergy Feedstocks: Ex Ante Survey Evidence from Wisconsin
Author(s) -
Mooney Daniel F.,
Barham Bradford L.,
Lian Chang
Publication year - 2015
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1093/aepp/ppu033
Subject(s) - ex ante , agricultural economics , bioenergy , economics , survey data collection , production (economics) , valuation (finance) , agriculture , business , agricultural science , natural resource economics , biofuel , environmental science , microeconomics , geography , finance , ecology , macroeconomics , archaeology , biology , statistics , mathematics
Second‐generation bioenergy feedstocks stand poised to become a key component of the nation's agricultural and energy sectors, yet few studies have examined farm supply response using survey information. We use contingent valuation data from farmers in southwestern Wisconsin to develop ex ante supply estimates for two prospective feedstocks—corn stover and switchgrass—in terms of farmers' extensive and intensive acreage decisions. Supply response is found to be price inelastic and spatially fragmented, making widespread production unlikely in the near‐term. However, heterogeneity in farmer reservation prices suggests that agglomerations or “hot spots” of feedstock supply could arise at local or regional levels.