Brandon Schaufele

Salience of Carbon Taxes in the Gasoline Market

We demonstrate that the carbon tax imposed by the Canadian province of British Columbia caused a decline in short-run gasoline demand that is significantly greater than would be expected from an equivalent increase in the market price of gasoline. That the carbon tax is more salient, or yields a larger change in demand than equivalent market price movements, is robust to a range of specifications. As a result of the large consumer response to the tax, we calculate that during its first four years, the tax reduced carbon dioxide emissions from gasoline consumption by 2.4 million tonnes.We demonstrate that the carbon tax imposed by the Canadian province of British Columbia, a unique carbon pricing policy that comprehensively applies to all fossil fuels, caused a decline in short-run gasoline demand that is significantly greater than would be expected from an equivalent increase in the market price of gasoline. That the carbon tax is more salient, or yields a larger change in demand than equivalent market price movements, is robust to a range of specifications including intuitively plausible and strong instrumental variables. Along with calculating the reduction in carbon dioxide emissions attributable to the tax, we discuss potential explanations for the differential consumer responses to the carbon tax relative to the marketdetermined price.

Campaign Contributions Over CEOs’ Careers

Individuals dominate money in politics, accounting for over 90% of campaign contributions, but studies of individuals’ giving are scarce. We show that individuals increase their personal contributions dramatically when they assume leadership roles at organizations such as labor unions, non-profits, and firms. Using a newly constructed dataset that focuses on personal contributions, we exploit variation in the leadership status of all 2,198 individuals who were S&P 500 CEOs at any point between 1991 and 2008 to identify a

The Effect of Carbon Taxes on Agricultural Trade

4,000 jump in personal political giving when individuals become CEOs. Despite giving more money to more candidates, more political action committees (PACs), and more parties, active CEOs’ partisan orientations remain largely unchanged. Falsification tests of an underlying identification assumption demonstrate that these patterns hold whether an individual is promoted to CEO internally or appointed externally. While some fraction of CEOs’ contributions can be attributed to long-standing preferences, willingness, and ability to contribute, the striking change in behavior we identify cannot be explained by these factors alone.

New Vehicle Feebates

This study evaluates the implications of an actual carbon tax on the international competitiveness of the agricultural sector. Applying uniformly to all fossil fuels combusted within its borders, the province of British Columbia unilaterally introduced a carbon tax on July 1, 2008. Using commodity-specific trade flows and exploiting cross-provincial and inter-temporal variation, we find little evidence that the implementation of the carbon tax is associated with any meaningful effects on agricultural exports despite the sector being singled out as “at risk” by the provincial government. Allowing for heterogeneous responses by commodity, some statistically insignificant negative effects are shown for specific exports. Discussion of potential policy remedies to address the potential impacts of the tax on firm profitability and international competitiveness is also included.

Motivations for Corporate Political Activity

New vehicle feebate programs encourage improved fleet-wide vehicle fuel efficiency; yet analyses of these policies have been limited to ad hoc proposals. In this paper, we exploit an extensive, multi-year dataset which includes more than 16 million observations to evaluate the welfare implications of a long-standing vehicle feebate program in the Canadian province of Ontario. We: (1) show that second-best optimal feebates can be written as a function of new vehicle Pigouvian taxes; (2) find that Ontarios feebate program was welfare-enhancing relative to a no feebate scenario but that a second-best optimal benchmark would have yielded additional welfare while reducing fleet-wide emissions; and (3) find that Ontarian consumers responded asymmetrically to fees versus rebates.

Regulation and the financial performance of Canadian agribusinesses

Campaign contributions are typically seen as a strategic investment for firms; recent empirical evidence, however, has shown few connections between firms’ political investments and regulatory or performance improvements, prompting researchers to explore agency-based explanations for corporate politics. By studying intra-firm campaign contributions of CEOs and political action committees (PACs), we investigate these two hypotheses surrounding public politics and demonstrate that strategic and agency-based motivations may hold simultaneously. Exploiting transaction-level data, with over 6.8 million observations, we show that (i) when PACs give to specific candidates, executives give to the same candidates, especially those who are strategically important to the firm; and (ii) when executives give to candidates who are not strategically important, PACs give to the same candidates potentially due to agency problems within the firm.

Public Transit and Air Pollution

Purpose - The purpose of this paper is to investigate the relationships between regulatory changes, returns on equity and stock market valuations for Canadian food and non-food agribusinesses. Design/methodology/approach - Two empirical approaches are employed. First, an event study is used to evaluate the impact of official regulatory announcements on the stock market valuations of selected Canadian agribusinesses. Next, an approach introduced by Mishra Findings - The event study demonstrates that official regulatory announcement dates do not correspond with abnormal stock market returns for Canadian firms, while the Du Pont model yields mixed evidence with respect to their accounting profits. Research limitations/implications - This paper only considers publicly traded companies. As a result, survivorship bias may exist. Future research should include privately held and cooperative firms. Social implications - Food regulations can influence firm profits and shareholder wealth, so understanding how government actions influence agribusiness is important when considering the total costs of current and future food policy. Originality/value - The interaction between policy and the financial performance of Canadas publicly traded agribusinesses is an under-researched area and no studies have examined Canadian data. The results of this study are valuable to both policy makers and researchers.

Gasoline price and new vehicle fuel efficiency: Evidence from Canada

Advocates of public transit frequently tout improved air quality as a primary benefit. Yet little is known about the causal impacts of public transit on local air pollution. Exploiting variation in transit availability resulting from work stoppages in 18 Canadian cities between 1974-2011, this study identifies the effect of public transit on air pollution. Our findings indicate that transit leads to a 3.5 part-per-billion increase in nitrogen oxides while having no statistically significant effect on carbon monoxide or fine particulate matter. Estimates are robust to a series of specification and placebo tests and magnitudes are consistent with a calibrated simulation model. Overall, the results suggest that expanding the current configuration of public transit in North American cities is unlikely to yield improvements in local air quality.

Dissent in Parliament as Reputation Building

Using data on all new vehicles registered in Canada from 2000 to 2010, we estimate the elasticity of the fuel economy of the new vehicle stock with respect to gasoline price. We find that a 10% increase in gasoline price causes a 0.8% improvement in the fuel economy of new vehicles. However, we also show that consumers respond much more strongly to fuel taxes than to other components of the gasoline price. Finally, we provide evidence that consumers in dense urban areas are more responsive to changes in fuel prices than consumers living on the urban periphery.

Pollution and Politicians: The Effect of PM on MPs

Dissenting votes in parliamentary systems are overt displays of defiance by individual Members of Parliament (MPs) vis-a-vis their parties. Dissension is particularly surprising as in the vast majority of situations voting against ones party yields no change in legislative outcomes while still generating costs for MPs. This study examines the decisions of elected representatives who face conflicting incentives. A model is developed where MPs choose to dissent in an effort to build reputations with their local constituents. Using all 32,216 observations at MP-bill-vote level for the 39th Parliament of Canada, a reputation building hypothesis is specified and tested. I provide evidence that MPs whose previous election was competitive are 13 percent more likely to cast any dissenting vote and, for a one standard deviation decrease in expected margin of victory, 2.3 percent more likely to defect on any given vote, results which suggest that MPs are actively attempting to build reputations with their local constituents