The Effect of Carbon Tax on Farm Income: Comment
Peter Slade (),
Patrick Lloyd-Smith () and
Tristan Skolrud ()
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Peter Slade: University of Saskatchewan
Environmental & Resource Economics, 2020, vol. 77, issue 2, No 2, 335-344
Abstract Olale et al. (Environ Resour Econ 605–623, 2019) argue that the introduction of a carbon tax substantially reduced farm income in the Canadian province of British Columbia. In this comment, we raise serious concerns with their data, empirical methods, and theory. Most importantly, Olale et al. (2019) assume that the difference in farm income between British Columbia and the rest of Canada would have remained constant over time without the introduction of the carbon tax. We provide evidence that this is unlikely to be true and show that their results disappear when we account for differential trends. We conclude that the estimates in Olale et al. (2019) do not represent the effect of a carbon tax on farm income.
Keywords: Carbon tax; Farm-level impacts; Difference-in-differences; British Columbia (search for similar items in EconPapers)
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