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Asymmetric responses to severance tax changes: Coal production in West Virginia

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  • Hoy, Kyle A.

Abstract

I use aggregate and mine-level data to analyze changes in coal production due to West Virginia imposing a 56 cent per short ton severance tax in 2005, as well as the effect of the tax's subsequent repeal in 2016. To do so, I construct a dataset of quarterly coal production for West Virginia and neighboring control states not exposed to changes in severance tax policy. Difference-in-differences results suggest that the severance tax increase had no significant effect on either aggregate or mine-level production. Conversely, I find that the severance tax decrease led to an 11.8% increase in aggregate coal production and a 24.4% increase in mine-level production.

Suggested Citation

  • Hoy, Kyle A., 2023. "Asymmetric responses to severance tax changes: Coal production in West Virginia," Energy Economics, Elsevier, vol. 125(C).
    • Handle: RePEc:eee:eneeco:v:125:y:2023:i:c:s0140988323003389
    DOI: 10.1016/j.eneco.2023.106840
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    References listed on IDEAS

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    More about this item

    Keywords

    Coal; Severance tax; Difference-in-differences;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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