Swenson, David A.

June 2006

Measuring the net economic impacts of ethanol plants has been problematical: access to good industrial accounts is limited, the sector has historically gone through volatile swings, regional logistical responses to a plant beyond corn inputs are not well understood, and the sector is currently expanding rapidly. In the current uncertain energy world, the prices paid for inputs and received for outputs are also volatile. There exists quite a bit of confusion about the overall value of this dimension of value added agricultural processing to local, regional, and national accounts. There is a tendency for advocates to overstate, over-describe, and outright double-count economic activity linked to ethanol and other biofuels production. This paper presents the findings of a modeled ethanol plant configuration in a hypothetical three-county region in Iowa. (Modified slightly since first posted in June, 2006, to include language and technical corrections)

JEL Classification: C50

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