Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/175066 
Year of Publication: 
2016
Series/Report no.: 
IFN Working Paper No. 1129
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
We estimate the impact of the removal of a railway transportation subsidy on the local economies of Alberta, Saskatchewan and Manitoba, exploiting the large regional variation in these one-time freight rate increases. We find that higher freight rates - and hence lower farm gate prices - resulted in significantly lower farm revenues, farm asset values and farm numbers. Local employment in non-agricultural sectors systematically declined in areas that were hardest hit by the subsidy removal. The results suggest that the subsidy removal had detrimental spillover effects on local non-agricultural economy that are much larger than standard input-output models would predict.
Subjects: 
Agricultural Trade Liberalization
Export Subsidy
Market Access
Spillovers
JEL: 
F14
O13
Q16
Q17
Q18
Document Type: 
Working Paper

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