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Vegetable Spirits and Energy Policy
Author(s) -
Towe Charles,
Tra Constant I.
Publication year - 2013
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aas079
Subject(s) - mandate , capitalization , propensity score matching , estimator , agriculture , matching (statistics) , agricultural economics , production (economics) , difference in differences , economics , business , agricultural science , public economics , econometrics , environmental science , statistics , mathematics , geography , political science , microeconomics , philosophy , linguistics , archaeology , law
This study investigates the extent to which the 2005 Energy Policy Act, specifically the ethanol mandate, contributed to the rise in farmland values. We use the location of new ethanol plants to identify the capitalization effect of the mandate by these spatially advantaged operations. We use a difference‐in‐difference propensity score matching estimator to control for the non‐random selection of ethanol production facilities. The empirical strategy uses farmland parcel values from the 2001–7 June Agriculture Survey. We find that new ethanol facilities had no effect on nearby farmland values prior to the mandate but had statistically significant effects after the policy.