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Absolute ethanol (100% ethanol) is preferred for the synthesis of ethyl p-aminobenzoate because the presence of water in 95% ethanol can interfere with the reaction. Water can compete with the alcohol in the esterification reaction, leading to a lower yield of the desired product. Additionally, the water can hydrolyze the ester product, further reducing the yield. Using absolute ethanol ensures a more efficient and cleaner reaction, maximizing the production of ethyl p-aminobenzoate.