Many people in US are willing to pay a premium for ethanol, but not enough to justify the government mandate for the corn-based fuel, a Michigan State University economist argues. Soren Anderson studied the demand for ethanol, or E85, in the United States. He surprisingly found that when ethanol prices rose 10 cents per gallon, demand for ethanol fell only 12% to 16% on average. He was expecting a sharper decline in ethanol sales. His research, appearing in the March issue of the Journal of Environmental Economics and Management, is one of the first economics studies to examine how consumers… Login to continue

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