Agricultural Economics Department


Date of this Version

December 2007


Published in Cornhusker Economics, 12/19/2007. Produced by the Cooperative Extension, Institute of Agriculture and Natural Resources, Department of Agricultural Economics, University of Nebraska–Lincoln.


The ethanol boom has generated an unprecedented amount of industrial investment in many rural communities. However, local governments and economic developers have little reliable information regarding the economic impact of these plants in the community. An assortment of consultants and government agencies, including some universities, has produced a wide range of positive impacts that stretch beyond sound economic theory or method. Communities using these optimistic estimates risk investing scarce tax dollars and resources into ethanol projects that may not produce the full expected economic benefits. Thus, it is worth discussing a reasonable estimate of the likely economic impact of a 100 million-gallon-per-year (MGY) ethanol plant in a rural Nebraska county.