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Abstract
We
analyze
complicated
ethanol/commodity
policies
not
just
in
(q,
p)
space,
but
also
in
“policy
space”
and
“welfare
space.”
Specific
advantages
of
conducting
policy
analysis
in
welfare
and
policy
spaces
are
(1)
it
makes
clearer
the
distributional
consequences
of
policy
change
instead
of
focusing
solely
on
the
aggregate
welfare
consequences
of
policy
change;
(2)
it
can
be
used
to
analyze
the
effects
of
many
(even
infinitely
many)
policies
instead
of
just
a
few;
and
(3)
it
makes
clearer
what
it
means
for
policies
to
be
more/less
“efficient,”
and
for
policy
instruments
to
make
each
other
more/less
“efficient.”
We
show
the
usefulness
of
our
framework
to
critique
various
conclusions
that
have
recently
been
expressed
in
the
literature
on
ethanol
policies
that
employ
multiple
instruments.