Spatial heterogeneity of factors determining ethanol production site selection in the U.S., 2000-2007

Bivariate probit regression and spatial clustering methods analyze investment activity of ethanol plants at the county level for the contiguous 48 United States from 2000-2007. Infrastructure, product and input markets, fiscal policy of local communities, and state and federal incentives determined the location of ethanol plants. The ability to supply feedstock and the absence of previously established ethanol plants dominated the distribution of site selection. Other factors, such as access to railroads or navigable rivers, product markets, lower wages, producer credit and excise tax incentives, and methyl tertiary-butyl ether bans provided some counties comparative advantage with respect to attracting ethanol plants.