[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/regeco/v50y2015icp1-17.html
   My bibliography  Save this article

Regional economic impacts of the shale gas and tight oil boom: A synthetic control analysis

Author

Listed:
  • Munasib, Abdul
  • Rickman, Dan S.
Abstract
The dramatic increase in oil and gas production from shale formations has led to an intense interest in its impact on local area economies. Exploration, drilling and extraction are associated with direct increases in employment and income in the energy industry, but little is known about the impacts on other parts of local economies. Increased energy sector employment and income can have positive spillover effects through increased purchases of intermediate goods and induced local spending. Negative spillover effects can occur through rising local factor and goods prices and adverse effects on the local area quality of life. Therefore, this paper examines the net economic impacts of oil and gas production from shale formations for key shale oil and gas producing areas in Arkansas, North Dakota and Pennsylvania. The synthetic control method (Abadie and Gardeazabal, 2003; Abadie et al., 2010) is used to establish a baseline projection for the local economies in the absence of increased energy development, allowing for estimation of the net regional economic effects of increased shale oil and gas production.

Suggested Citation

  • Munasib, Abdul & Rickman, Dan S., 2015. "Regional economic impacts of the shale gas and tight oil boom: A synthetic control analysis," Regional Science and Urban Economics, Elsevier, vol. 50(C), pages 1-17.
    • Handle: RePEc:eee:regeco:v:50:y:2015:i:c:p:1-17
    DOI: 10.1016/j.regsciurbeco.2014.10.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0166046214001094
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.regsciurbeco.2014.10.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kinnaman, Thomas C., 2011. "The economic impact of shale gas extraction: A review of existing studies," Ecological Economics, Elsevier, vol. 70(7), pages 1243-1249, May.
    2. Douglas, Stratford M. & Walker, Anne, 2012. "Sample Selection in Appalachian Research," The Review of Regional Studies, Southern Regional Science Association, vol. 42(2), pages 143-159, Summer.
    3. Mark D. Partridge & Dan S. Rickman & Kamar Ali & M. Rose Olfert, 2008. "Lost in space: population growth in the American hinterlands and small cities," Journal of Economic Geography, Oxford University Press, vol. 8(6), pages 727-757, November.
    4. Lucija Muehlenbachs & Elisheba Spiller & Christopher Timmins, 2015. "The Housing Market Impacts of Shale Gas Development," American Economic Review, American Economic Association, vol. 105(12), pages 3633-3659, December.
    5. Dan Black & Terra McKinnish & Seth Sanders, 2005. "The Economic Impact Of The Coal Boom And Bust," Economic Journal, Royal Economic Society, vol. 115(503), pages 449-476, April.
    6. Lipscomb, Clifford & Wang, Yongsheng & Kilpatrick, Sarah J., 2012. "Unconvensional Shale Gas Development and Real Estate Valuation Issues," The Review of Regional Studies, Southern Regional Science Association, vol. 42(2), pages 161-175, Summer.
    7. Kelly D. Edmiston, 2004. "The Net Effects of Large Plant Locations and Expansions on County Employment," Journal of Regional Science, Wiley Blackwell, vol. 44(2), pages 289-320, May.
    8. Dan S. Rickman & Mouhcine Guettabi, 2015. "The Great Recession And Nonmetropolitan America," Journal of Regional Science, Wiley Blackwell, vol. 55(1), pages 93-112, January.
    9. Jason Brown & Dayton Lambert, 2014. "Location decisions of natural gas extraction establishments: a smooth transition count model approach," Research Working Paper RWP 14-5, Federal Reserve Bank of Kansas City.
    10. Dorfman, Jeffrey H. & Patridge, Mark D. & Galloway, Hamilton, 2008. "Are High-Tech Employment and Natural Amenities Linked?: Answers from a Smoothed Bayesian Spatial Model," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6459, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. repec:wvu:wpaper:12-01 is not listed on IDEAS
    12. Partridge, Mark D. & Rickman, Dan S. & Ali, Kamar & Olfert, M. Rose, 2009. "Agglomeration spillovers and wage and housing cost gradients across the urban hierarchy," Journal of International Economics, Elsevier, vol. 78(1), pages 126-140, June.
    13. McGranahan, David A., 1999. "Natural Amenities Drive Rural Population Change," Agricultural Economic Reports 33955, United States Department of Agriculture, Economic Research Service.
    14. Sarah Bohn & Magnus Lofstrom & Steven Raphael, 2014. "Did the 2007 Legal Arizona Workers Act Reduce the State's Unauthorized Immigrant Population?," The Review of Economics and Statistics, MIT Press, vol. 96(2), pages 258-269, May.
    15. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    16. Weber, Jeremy G., 2014. "A decade of natural gas development: The makings of a resource curse?," Resource and Energy Economics, Elsevier, vol. 37(C), pages 168-183.
    17. Stephen G. Donald & Kevin Lang, 2007. "Inference with Difference-in-Differences and Other Panel Data," The Review of Economics and Statistics, MIT Press, vol. 89(2), pages 221-233, May.
    18. Steven C. Deller & Tsung-Hsiu (Sue) Tsai & David W. Marcouiller & Donald B.K. English, 2001. "The Role of Amenities and Quality of Life In Rural Economic Growth," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 352-365.
    19. Guy Michaels, 2011. "The Long Term Consequences of Resource‐Based Specialisation," Economic Journal, Royal Economic Society, vol. 121(551), pages 31-57, March.
    20. Belal Fallah & Mark D. Partridge & Dan S. Rickman, 2014. "Geography and High-Tech Employment Growth in US Counties," Journal of Economic Geography, Oxford University Press, vol. 14(4), pages 683-720.
    21. James, Alex & Aadland, David, 2011. "The curse of natural resources: An empirical investigation of U.S. counties," Resource and Energy Economics, Elsevier, vol. 33(2), pages 440-453, May.
    22. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    23. White, Nancy, 2012. "A Tale of Two Shale Plays," The Review of Regional Studies, Southern Regional Science Association, vol. 42(2), pages 107-119, Summer.
    24. Thomas C. Buchmueller & John DiNardo & Robert G. Valletta, 2011. "The Effect of an Employer Health Insurance Mandate on Health Insurance Coverage and the Demand for Labor: Evidence from Hawaii," American Economic Journal: Economic Policy, American Economic Association, vol. 3(4), pages 25-51, November.
    25. repec:rre:publsh:v:33:y:2003:i:1:p:17-39 is not listed on IDEAS
    26. Brown, Jason P. & Weber, Jeremy G. & Wojan, Timothy R., 2013. "Emerging Energy Industries and Rural Growth," Economic Research Report 262215, United States Department of Agriculture, Economic Research Service.
    27. Alberto Abadie & Javier Gardeazabal, 2001. "The Economic Costs of Conflict: A Case-Control Study for the Basque Country," NBER Working Papers 8478, National Bureau of Economic Research, Inc.
    28. Sathya Gopalakrishnan & H. Allen Klaiber, 2014. "Is the Shale Energy Boom a Bust for Nearby Residents? Evidence from Housing Values in Pennsylvania," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(1), pages 43-66.
    29. Jason Brown, 2014. "Production of natural gas from shale in local economies: a resource blessing or curse?," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 1-29.
    30. Dan S. Rickman, 1992. "Estimating The Impacts Of Regional Business Assistance Programs: Alternative Closures In A Computable General Equilibrium Model," Papers in Regional Science, Wiley Blackwell, vol. 71(4), pages 421-435, October.
    31. Weber, Jeremy G., 2012. "The effects of a natural gas boom on employment and income in Colorado, Texas, and Wyoming," Energy Economics, Elsevier, vol. 34(5), pages 1580-1588.
    32. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    33. Papyrakis, Elissaios & Gerlagh, Reyer, 2007. "Resource abundance and economic growth in the United States," European Economic Review, Elsevier, vol. 51(4), pages 1011-1039, May.
    34. Rahm, Dianne, 2011. "Regulating hydraulic fracturing in shale gas plays: The case of Texas," Energy Policy, Elsevier, vol. 39(5), pages 2974-2981, May.
    35. Weinstein, Amanda L., 2014. "Local Labor Market Restructuring in the Shale Boom," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 44(1).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Timothy W. Kelsey & Mark D. Partridge & Nancy E. White, 2016. "Unconventional Gas and Oil Development in the United States: Economic Experience and Policy Issues," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 38(2), pages 191-214.
    2. Tsvetkova, Alexandra & Partridge, Mark D., 2016. "Economics of modern energy boomtowns: Do oil and gas shocks differ from shocks in the rest of the economy?," Energy Economics, Elsevier, vol. 59(C), pages 81-95.
    3. Guettabi, Mouhcine & James, Alexander, 2020. "Who benefits from an oil boom? Evidence from a unique Alaskan data set," Resource and Energy Economics, Elsevier, vol. 62(C).
    4. Rickman, Dan S. & Wang, Hongbo & Winters, John V., 2017. "Is shale development drilling holes in the human capital pipeline?," Energy Economics, Elsevier, vol. 62(C), pages 283-290.
    5. Weinstein, Amanda & Partridge, Mark & Tsvetkova, Alexandra, 2017. "Follow the Money: How Does the Income Flow After an Energy Boom," MPRA Paper 77336, University Library of Munich, Germany.
    6. Rickman, Dan & Wang, Hongbo, 2020. "What goes up must come down? The recent economic cycles of the four most oil and gas dominated states in the US," Energy Economics, Elsevier, vol. 86(C).
    7. Weinstein, Amanda L. & Partridge, Mark D. & Tsvetkova, Alexandra, 2018. "Follow the money: Aggregate, sectoral and spatial effects of an energy boom on local earnings," Resources Policy, Elsevier, vol. 55(C), pages 196-209.
    8. Joseph Marchand & Jeremy Weber, 2018. "Local Labor Markets And Natural Resources: A Synthesis Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 469-490, April.
    9. Betz, Michael R. & Partridge, Mark D. & Farren, Michael & Lobao, Linda, 2015. "Coal mining, economic development, and the natural resources curse," Energy Economics, Elsevier, vol. 50(C), pages 105-116.
    10. Jason P. Brown & Timothy Fitzgerald & Jeremy G. Weber, 2019. "Does Resource Ownership Matter? Oil and Gas Royalties and the Income Effect of Extraction," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(6), pages 1039-1064.
    11. Fleming, David & Komarek, Timothy & Partridge, Mark & Measham, Thomas, 2015. "The Booming Socioeconomic Impacts of Shale: A Review of Findings and Methods in the Empirical Literature," MPRA Paper 68487, University Library of Munich, Germany.
    12. Grant D. Jacobsen, 2019. "Who Wins In An Energy Boom? Evidence From Wage Rates And Housing," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 9-32, January.
    13. Tsvetkova, Alexandra & Partridge, Mark, 2017. "The shale revolution and entrepreneurship: An assessment of the relationship between energy sector expansion and small business entrepreneurship in US counties," Energy, Elsevier, vol. 141(C), pages 423-434.
    14. Mark Partridge & Shawn M. Rohlin & Amanda L. Weinstein, 0. "Firm formation and survival in the shale boom," Small Business Economics, Springer, vol. 0, pages 1-22.
    15. Keeler, Zachary T. & Stephens, Heather M., 2020. "Valuing shale gas development in resource-dependent communities," Resources Policy, Elsevier, vol. 69(C).
    16. Maguire, Karen & Munasib, Abdul, 2015. "The Disparate Influence of State Renewable Portfolio Standards (RPS) on U.S. Renewable Electricity Generation Capacity," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 202851, Agricultural and Applied Economics Association.
    17. Karen Maguire & Abdul Munasib, 2016. "The Disparate Influence of State Renewable Portfolio Standards on Renewable Electricity Generation Capacity," Land Economics, University of Wisconsin Press, vol. 92(3), pages 468-490.
    18. Mark Partridge & Shawn M. Rohlin & Amanda L. Weinstein, 2020. "Firm formation and survival in the shale boom," Small Business Economics, Springer, vol. 55(4), pages 975-996, December.
    19. Karen Maguire & Abdul Munasib, 2018. "Electricity Price Increase in Texas: What is the Role of RPS?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 69(2), pages 293-316, February.
    20. Jeremy G. Weber & J. Wesley Burnett & Irene M. Xiarchos, 2016. "Broadening Benefits from Natural Resource Extraction: Housing Values and Taxation of Natural Gas Wells as Property," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 35(3), pages 587-614, June.

    More about this item

    Keywords

    Shale oil and gas; Synthetic control method; Economic impacts;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:regeco:v:50:y:2015:i:c:p:1-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/regec .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.