2015/05/12 by Shon Ferguson, M. Rose Olfert · 1 voice
Economics, Econometrics and Finance · #Economics of Agriculture and Food Markets #Global trade and economics #Merger and Competition Analysis
paper · doi:10.1093/ajae/aav018
openalex publication_date 2015/05/12 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
We estimate the impact that removing a railway transportation subsidy has on the adoption of production technology for Western Canadian farms by using a unique combination of census and freight rate data. We exploit the large regional variation in these one‐time freight rate increases to identify causal effects of increased competitive pressure. Using a difference‐in‐differences methodology, we find that higher freight rates—and hence lower farm gate prices—induced farmers to adopt new, more efficient production technology. We also find that farmers experiencing the greatest transportation cost increases also increased their fertilizer usage and made significant land use changes.