gasoline price volatility and the elasticity of demand for gasoline abstract we examine how gasoline price volatility impacts consumers price elasticity of demand for gasoline results show that volatility in prices decreases consumer demand for gasoline in the intermediate run we also find that consumers appear to be less elastic in response to changes in gasoline price when gasoline price volatility is medium or high compared to when it is low moreover we find that when we control for variance in our econometric model gasoline price elasticity of demand is lower in magnitude in the long run

demystifying rins a partial equilibrium model of u s biofuels markets abstract we explore four fundamental channels of mandate compliance available under current u s biofuel policy increased ethanol blending through e10 or e85 increased biodiesel blending and a reduction in the overall compliance base simulation results highlight the interplay and varying importance of these channels at increasing blend mandate levels in addition we establish how rin prices are formed the value of a rin in equilibrium is shown to reflect the marginal cost of compensating the blender for employing one additional ethanol equivalent unit of biofuel this contrasts with existing research equating the price of rins to the gap between ethanol supply and demand evaluated at the mandate level we demonstrate the importance of this distinction in case of binding demand side infrastructure constraints such as the ethanol blend wall as percentage blend mandates increase the market for low ethanol blends may contract in order to reduce the overall compliance base this has important implications for implied ethanol demand in the economy

imperfect information and consumption in the united states and the united kingdom pischke 1995 has argued that imperfect information may account for the failure of hall s permanent income hypothesis to explain the behaviour of aggregate consumption we identify the restrictions that pischke s theory places on the dynamics of aggregate consumption and test them using quarterly data for the united kingdom and united states our results suggest that while pischke s model explains some features of the data which the hall model cannot it is formally rejected

econometric analysis of cps type unemployment data analysts studying the unemployment experiences of population members often have access to data collected from a sample of individuals at a point in time which contain the length of the ongoing spell of unemployment for sample members currently unemployed no information regarding the lengths of ongoing employment spells is collected this paper considers how such information may be utilized in the estimation of parameters of alternating renewal process models of labor market attachment in the presence of both observed and unobserved population heterogeneity a number of models are presented and estimation is carried out using a cps type data set from italy

compliance path and impact of ethanol mandates on retail fuel market in the short run past studies have examined the impact of ethanol mandates with a long run perspective and were thus able to assume away short run rigidities and some of the specifics of the biofuel mandates these studies have been of limited use in informing current policy debates because the short to medium run reality is one of strong regulatory and infrastructure rigidities that restrict how ethanol can be consumed in the united states our objectives in this paper are to provide a more coherent framework than currently exists to model and understand how compliance with ethanol mandates in the short run cannot be met with conventional gasoline blends how compliance impacts fuel prices and consumer and producer welfare and also to measure the size of the transfer that occurs between refineries and ethanol producers through the market s renewable identification numbers rins in a model calibrated to 2015 data we find that the effects of increasing ethanol mandates that are physically feasible are close to zero on the retail price of gasoline this result is robust to different gasoline prices supply elasticities and export demand elasticities increased mandates can have a large negative effect on the price of high level ethanol gasoline blends such as e85 if the mandates are increased to approach consumption capacity

the estimation of models of labour market behaviour in this paper we view the labour market experience of individuals as a process of movement between the states of employment and unemployment we note that there are three main ways of sampling members of the labour force namely sampling the members of a specific state sampling the people entering or leaving a state and sampling the population regardless of state the joint distribution of observable and unobservable characteristics of individuals depends on the mode of sampling adopted we examine this dependence and its implications for the interpretation of estimates of models of labour market behaviour

blending under uncertainty real options analysis of ethanol plants and biofuels mandates abstract the value of a representative ethanol producer that benefits from both low and high gasoline prices in the short run is modeled ethanol producers make a modest competitive profit in the mandate induced region of production a low price of gasoline increases the demand for blend ethanol and consequently increases the profit of ethanol producers on the other hand when gasoline becomes costlier than ethanol the capacity constraints of the biofuels sector bind and ethanol producers gain large quasi monopoly margins this is an interesting example of a market where two commodities are complement up to a point and then substitute after that we postulate the value of an ethanol producer as a strangle option consisting of two real options the option to substitute gasoline at times of expensive crude oil and the option to expand supply of blend at times of cheap gasoline using a dynamic model we show that the higher volatilities of crude oil and ethanol costs increase biofuels firms value we also find non monotonic relationships between the value of an ethanol plant and several underlying variables including gasoline price level we estimate the value provided by a 10 blend mandate to be around 150 000 000 for a representative ethanol unit our results offer a novel view of oil and feedstock price risks in contrast to the common belief that considers those risks as a negative factor for the biofuels sector

a bivariate duration model for job mobility of two earner households abstract in recent years we have observed an increasing interest in the job mobility patterns of employed persons a new issue in this context is the mutual dependence of job mobility choice of workers who belong to the same household in the present paper we focus on bivariate duration models of stock sampled data in which dependence is induced through mixing we apply the estimation method on the basis of an empirical study on the mutual dependence of job mobility of workers belonging to a two earner household in the netherlands an interesting empirical result is that the marginal willingness to pay for a reduction in commuting time in a two wage earner household is higher than that usually found for single earner workers

stock and flow sampling abstract this letter is concerned with the joint distribution of variables that effect the duration of stay in a given state for example unemployment it deals with the difference in the joint distribution between the population of residents of the state the stock and the population of entrants or leavers the flow and with the implications of this difference for econometric inferences

the impact of being offered and receiving classroom training on the employment histories of disadvantaged women evidence from experimental data we address two questions using experimental data on disadvantaged women first what is the impact of being offered jtpa classroom training on the duration of unemployment and employment second what is the effect of actually participating in this training on the length of such spells belonging to the treatment group shortens unemployment spells but has no effect on employment spells actually participating in training has a larger positive effect on the exit rate from unemployment than the effect of simply being a member of the treatment group ignoring the endogeneity of actual training in estimation substantially underestimates its effect

a piecewise constant hazard rate model for the duration of unemployment in single interview samples of the stock of unemployed abstract in this paper a flexible piecewise constant hazard rate model of the duration of unemployment is derived for grouped data generated by a single interview sample of the stock of the unemployed a proportional hazards specification is used and unobserved heterogeneity is allowed for

the demand for ethanol as a gasoline substitute abstract this paper estimates household preferences for ethanol e85 as a gasoline e10 substitute i develop a theoretical model linking the shape of the ethanol demand curve to the underlying distribution among households of willingness to pay for ethanol i estimate the model using instrumental variables techniques and data from many retail fueling stations i find that a 0 10 per gallon increase in ethanol s price relative to gasoline leads to a 12 16 decrease in the quantity of ethanol demanded my findings imply that preferences for ethanol are heterogeneous and that a substantial fraction of households are willing to pay a premium for the fuel this reduces substantially the simulated efficiency cost of an ethanol content standard since some households choose ethanol without large subsidies mitigating deadweight losses

pass through of the policy induced e85 subsidy insights from hotelling s model abstract we build a structural model of imperfect competition for a retail market that supplies both low ethanol e10 and high ethanol e85 gasoline blends the model permits us to study some impacts of the e85 subsidy induced by the u s renewable fuel standard specifically how the pass through of this subsidy to retail prices is affected by market power the model is rooted in hotelling s horizontal differentiation framework which is extended to also represent the imperfect substitutability between e10 and e85 a vertical product differentiation attribute the model naturally captures two sources of imperfect competition in the fuel market refueling stations market power arising from their spatial location and limited availability of e85 stations we derive both analytical and numerical solutions for nash equilibrium outcomes under various scenarios in our baseline parameterization when the penetration of e85 stations is incomplete we find that the pass through rate is about 0 7 complete penetration of e85 stations leads to near complete pass through notwithstanding the market power enjoyed by stations because of their spatial location with monopolistic market power e g collusion however with full penetration of e85 stations the pass through rate is lower moreover when market power only arises from location differentiation duopoly model with full penetration of e85 the pass through rate converges to one as the subsidy gets large whereas it converges to zero if a station has exclusivity in selling e85 partial penetration of e85 or there is collusion monopoly power from collusion

search models and applied labor economics individual effects in a nonlinear model explicit treatment of heterogeneity in the empirical job search model this paper extends the empirical version of a job search model to permit heterogeneity in the location of wage offer distributions population variance in wage offers is decomposed into variance due to heterogeneity and variance facing each individual heterogeneity is found to be an important source of offer variance in the population the amount of pure wage offer dispersion facing individuals is found to contribute little to population variance

the demand for e85 geographical location and retail capacity constraints abstract consumption of high ethanol gasoline blends must increase if united states renewable biofuel mandates are to rise above current levels as envisioned by the renewable fuel standard one such blend is e85 which contains no more than 85 ethanol and no less than 15 gasoline we derive the demand for e85 based on a model of motorists preferences for motor fuel blends and calibrate the demand for e85 using data on the location of flex vehicles and fuel stations that sell e85 in the united states we also show how limits on the capacity of fuel stations to sell e85 affect demand and explore the potential future demand for e85 by increasing the number of fuel stations offering e85 and the number of flex vehicles we show that the existing fleet of flex vehicles is sufficient to accommodate more than 15 billion gallons of ethanol without a large price discount on e85 only if the number of stations that sell e85 increases substantially provided with fast enough installation of new e85 pumps this level of consumption would be sufficient to meet the mandates envisioned for conventional ethanol by 2015

analysing incomplete individual employment histories using indirect inference in this paper we apply the indirect inference method to estimate the parameters of a semi markov transition model when the data are subject to a complex form of censoring there is no explicit expression for the likelihood function and therefore maximum likelihood estimation is computationally burdensome the econometric methodology of indirect inference is first tested on simulated data under various assumptions about the distribution of spell durations and transitions then it is applied to labour market transitions between self employment wage work and unemployment using the 1986 1988 french labour force survey although the analysis is basically a reduced form analysis we motivate our transition model in terms of a structural search model

policy shocks and market based regulations evidence from the renewable fuel standard the renewable fuel standard mandates large increases in u s biofuel consumption and is implemented using tradable compliance credits known as rins in early 2013 rin prices soared causing the regulator to propose reducing future mandates we estimate empirically the effect of three policy shocks that reduced the expected mandates in 2013 we find that the largest of these shocks decreased the value of the fuel industry s 2013 compliance obligation by 7 billion we then study the effects of the shocks on commodity markets and the market value of publicly traded biofuel firms results show that the burden of the mandate reductions fell primarily on advanced biofuel firms and commodity markets of the marginal compliance biofuel we argue that the policy shocks reduced the incentive to invest in the technologies required to meet the future objectives of the rfs and discuss alternative policy designs to address the problems that arose in 2013

attrition in longitudinal panel data and the empirical analysis of dynamic labour market behaviour in the empirical analysis of unemployment durations and job durations it is generally assumed that the stochastic processes underlying labour market behaviour and the behaviour concerning participation in a panel survey are independent however there are reasons to believe that the probability of dropping out of the panel is related to the rate at which a different job is found if there is such a relation and if it is ignored then the estimator of the rate at which individuals become employed or change jobs will generally be inconsistent in this paper we analyse the relation between the duration spent in a particular labour market state and the duration of panel survey participation by explicitly modelling and estimating the joint distribution of both durations the emphasis will be on models allowing for stochastically related unobserved determinants of both types of duration we estimate models both for unemployment durations and for job durations copyright 1994 john wiley sons ltd

flex fuel vehicle adoption and dynamics of ethanol prices lessons from brazil abstract focusing on dynamics of the relative prices of substitute fuels namely ethanol and gasoline this study quantifies the impact of the increase in shares of flex fuel vehicles ffvs in the vehicle fleet on the domestic ethanol prices in brazil a modified partial adjustment model is employed estimation results provide strong support for our research hypotheses i when consumers can choose between the fuels the relative ethanol and gasoline prices converge to a long run equilibrium level which is determined by the fuel economy and ii price dynamics are largely determined by market supply and demand factors including the price of sugar ethanol exports and composition of vehicle fleet furthermore the impacts of demand factors such as ethanol exports are strengthened by the increasing proportion of ffvs in the vehicle fleet

using the competitive storage model to estimate the impact of ethanol and fueling investment on corn prices abstract the impact of biofuel mandates on the prices of commodities used to produce food continues to be a major consideration by policy makers more recently concern about high compliance costs of oil companies due to mandates led to reductions in us biofuel mandates to gain insights into the policy impacts of mandates on agricultural commodity prices and compliance costs requires development of dynamic models that can capture the fact that many agricultural commodities used to produce biofuels can be stored and that flexible compliance mechanisms allow for banking and borrowing of tradable permits us biofuel mandates are enforced using a system of tradable permits called rins rin market dynamics are important because rins can be banked for the future or borrowed from the future corn is the primary u s biofuel feedstock and is storable rational expectations competitive storage models are well suited to capture the dynamic behavior of commodity markets such a model is developed here for corn and rin markets to estimate the impacts of alternative future ethanol mandate levels the model considers corn use for ethanol storage and all other uses in each period accounting for two random variables oil prices and corn yields borrowing and banking provisions of the renewable fuels standard mandate are explicitly integrated into the model we use the model to provide estimates of the impact on corn prices corn plantings and ethanol production under two ethanol mandate scenarios for six marketing years from 2016 17 our scenarios are a combination of volume requirements and infrastructure investment the first scenario is one in which corn ethanol mandates stay the same as required in the current and proposed rfs and additional e85 stations are introduced that allow for compliance with higher mandates the second scenario is one in which no investment occurs and the environmental protection agency reduces the mandate to 13 87 billion gal a level that can just be met with 10 percent ethanol blends comparing the results for two scenarios we find that average corn prices are about 5 to 6 lower with the reduced mandates or about 22 to 30 cents per bushel while average rin prices drop from around 60 to 40 cents per rin