Publication Detail

"Modeling Ethanol Investment Decisions", chapter 28 in Modelling, Dynamics, Optimization and Bioeconomics I

UCD-ITS-RP-14-76

Reprint

Sustainable Transportation Energy Pathways (STEPS)

Suggested Citation: Lin, Cynthia C.-Y. (2014) "Modeling Ethanol Investment Decisions," in Modelling, Dynamics, Optimization and Bioeconomics I. A.. A. Pinto and D. Zilberman, eds. Springer International Publishing.

This article reviews some of the papers my co-authors and I have written analyzing what factors affect the decision to invest in building new ethanol plants using a dynamic structural econometric model of the investment timing game. The results of our research will help determine which policies and factors can promote fuel-ethanol industry development. In Lin and Thome (Investment in corn-ethanol plants in the Midwestern United States: an analysis using reduced-form and structural models, Working paper, University of California at Davis, 2013), we estimate a model of the investment timing game in corn ethanol plants in the United States. This model follows my previous work estimating a structural econometric model of the multi-stage dynamic investment timing game in offshore petroleum production (Lin, 2013). In Lin and Yi (Ethanol plant investment in Canada: a structural model, Working paper, University of California at Davis, 2013; What factors affect the decision to invest in a fuel ethanol plant? a structural model of the ethanol investment timing game, Working paper, University of California at Davis, 2013), we estimate a model of the investment timing game in ethanol plants worldwide that allows for the choice among different feedstocks.

Available for purchase at: DOI: 10.1007/978-3-319-04849-9_28