Iowa NSF EPSCoR Energy Policy Seminar Series

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Date/Time:Monday, 04 Apr 2016 from 3:40 pm to 5:00 pm
Location:0013 Curtiss Hall
Channel:Bioeconomy Institute
Categories:Lectures Live Green
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"The pass-through of RIN prices to wholesale and retail fuels under the Renewable Fuel Standard," James Stock, Harvard University, Cambridge, Massachusetts.

This presentation examines the extent to which RIN prices are passed through to the price of obligated fuels and provides econometric results that complement the graphical analysis in Burkholder (2015). We analyzed daily data on RINs and fuel prices from January 1, 2013 through March 10, 2015. We also examined the transmission of RIN prices to retail fuel prices. We found no statistical evidence linking changes in RIN prices to changes in E10 prices. We also examined the price of E85. In contrast to the foregoing results, which are consistent with theory, the passthrough of RIN prices to the E85-E10 spread is precisely estimated to be zero if one adjusts for seasonality (as we argue should be done), or if not, is at most 30%. Over this period, on average high RIN prices did not translate into discounted prices for E85.

James H. Stock is the Harold Hitchings Burbank Professor of Political Economy, Faculty of Arts and Sciences and member of the faculty at the Harvard Kennedy School. He received a M.S. in statistics and a Ph.D. in economics from the University of California, Berkeley. His research areas are empirical macroeconomics, monetary policy, econometric methods, and energy and environmental policy. He is Co-Editor of the Brookings Papers on Economic Activity and is a coauthor with Mark Watson of a leading introductory econometrics textbook and is a member of various professional boards. He previously served as Managing Editor of the Review of Economics and Statistics from 1992-2003, as Chair of the Harvard Economics Department from 2007-2009, as Co-Editor of Econometrica from 2009-2012, and as Member of President Obama's Council of Economic Advisers from 2013-2014.