This is a class act in reasoning transparency. I love how easy it is to skim and drill down into things for more detail. Same goes for the pre-print and replication code.
Nits:
I was confused what calibration meant since I think of this exercise as simulation. To me, calibration is taking some observed data and reverse engineering the elasticity. But this is starting with the elasticity values—taken from the Bouyssou et al. (2024) meta-analysis—and seeing how that goes forward in a pretend-tax situation.
I would have loved to hear about how trustworthy you found the Bouyssou et al. (2024) study, since it’s providing the elasticity values for your main analysis. That meta-analysis is really cool and probably the best we have. But it also feels like a bucket of numbers that doesn’t think too critically about its inputs. And cross-price elasticity feels like a tricky thing to estimate, something Rethink Priorities wrote about here.
But it’s still really cool. I like how simple this is conceptually and that (given some assumptions) carbon tax can be net-positive for all animals.
Thank you for the kind words and the useful feedback!
My understanding is that calibration is picking numbers for parameters in a otherwise pre-defined model to make it match the real world, and what you’re describing I think of as estimation rather than calibration. I’ll add a footnote to make my use of the word a little clearer!
You’re right on the validity of the Bouyssou et al. (2024) paper. There are quite some differences in the measured elasticity estimates in the literature, unfortunately. I’m more worried about the own-price elasticity of supply, though, as the literature is much more scarce and old.
This is a class act in reasoning transparency. I love how easy it is to skim and drill down into things for more detail. Same goes for the pre-print and replication code.
Nits:
I was confused what calibration meant since I think of this exercise as simulation. To me, calibration is taking some observed data and reverse engineering the elasticity. But this is starting with the elasticity values—taken from the Bouyssou et al. (2024) meta-analysis—and seeing how that goes forward in a pretend-tax situation.
I would have loved to hear about how trustworthy you found the Bouyssou et al. (2024) study, since it’s providing the elasticity values for your main analysis. That meta-analysis is really cool and probably the best we have. But it also feels like a bucket of numbers that doesn’t think too critically about its inputs. And cross-price elasticity feels like a tricky thing to estimate, something Rethink Priorities wrote about here.
But it’s still really cool. I like how simple this is conceptually and that (given some assumptions) carbon tax can be net-positive for all animals.
Thank you for the kind words and the useful feedback!
My understanding is that calibration is picking numbers for parameters in a otherwise pre-defined model to make it match the real world, and what you’re describing I think of as estimation rather than calibration. I’ll add a footnote to make my use of the word a little clearer!
You’re right on the validity of the Bouyssou et al. (2024) paper. There are quite some differences in the measured elasticity estimates in the literature, unfortunately. I’m more worried about the own-price elasticity of supply, though, as the literature is much more scarce and old.