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The Effect of Carbon Tax on Farm Income: Comment

Author

Listed:
  • Peter Slade

    (University of Saskatchewan)

  • Patrick Lloyd-Smith

    (University of Saskatchewan)

  • Tristan Skolrud

    (University of Saskatchewan)

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.

Suggested Citation

  • Peter Slade & Patrick Lloyd-Smith & Tristan Skolrud, 2020. "The Effect of Carbon Tax on Farm Income: Comment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(2), pages 335-344, October.
    • Handle: RePEc:kap:enreec:v:77:y:2020:i:2:d:10.1007_s10640-020-00497-y
    DOI: 10.1007/s10640-020-00497-y
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    References listed on IDEAS

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    3. Edward Olale & Emmanuel K. Yiridoe & Thomas O. Ochuodho & Van Lantz, 2019. "The Effect of Carbon Tax on Farm Income: Evidence from a Canadian Province," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(2), pages 605-623, October.
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