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Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution: Comment

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  • Alexander G. James
  • Brock Smith

Abstract

Feyrer, Mansur, and Sacerdote (2017) estimates the spatial dispersion of the effects of the recent shale-energy boom by unconditionally regressing income and employment on energy production at various levels of geographic aggregation. However, producing counties tend to be located near each other and receive inward spillovers from neighboring production. This inflates the estimated effect of own-county production and spatial aggregation does not address this. We propose an alternative estimation strategy that accounts for these spillovers and identify reduced propagation effects. The proposed estimation strategy can be applied more generally to estimate the dispersion of multiple, simultaneously occurring economic shocks.

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  • Alexander G. James & Brock Smith, 2020. "Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution: Comment," American Economic Review, American Economic Association, vol. 110(6), pages 1905-1913, June.
    • Handle: RePEc:aea:aecrev:v:110:y:2020:i:6:p:1905-13
    DOI: 10.1257/aer.20180888
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    1. 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.
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    4. 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.
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    Cited by:

    1. Michael Pollmann, 2020. "Causal Inference for Spatial Treatments," Papers 2011.00373, arXiv.org, revised Jan 2023.
    2. 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).
    3. Zhang, Haoran, 2023. "Coal busts and urban recovery: Evidence from China," Regional Science and Urban Economics, Elsevier, vol. 101(C).
    4. Upton, Gregory B. & Yu, Han, 2021. "Labor demand shocks and earnings and employment differentials: Evidence from the U.S. shale oil & gas boom," Energy Economics, Elsevier, vol. 102(C).
    5. Berry, Kevin & James, Alexander & Smith, Brock & Watson, Brett, 2022. "Geography, Geology, and Regional Economic Development," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    6. Boslett, Andrew & Hill, Elaine, 2022. "Mortality during resource booms and busts," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    7. Diemer, Andreas, 2020. "Spatial diffusion of local economic shocks in social networks: evidence from the US fracking boom," LSE Research Online Documents on Economics 105868, London School of Economics and Political Science, LSE Library.
    8. Fabra, Natalia & Gutiérrez, Eduardo & Lacuesta, Aitor & Ramos, Roberto, 2022. "Do Renewables Create Local Jobs?," CEPR Discussion Papers 17206, C.E.P.R. Discussion Papers.
    9. Ben Gilbert & Hannah Gagarin & Ben Hoen, 2023. "Geographic Spillovers of Wind Energy Development on Wages and Employment," Working Papers 2023-01, Colorado School of Mines, Division of Economics and Business.
    10. Ryan A. Decker & Meagan McCollum & Gregory B. Upton, Jr., 2020. "Boom Town Business Dynamics," Finance and Economics Discussion Series 2020-081, Board of Governors of the Federal Reserve System (U.S.).
    11. Eife, Thomas, 2020. "The General Equilibrium Effects of the Shale Revolution," Working Papers 0694, University of Heidelberg, Department of Economics.
    12. Kuan‐Ming Huang & Xiaoli Etienne, 2021. "Impact of Marcellus and Utica shale exploitation on Ohio, Pennsylvania, and West Virginia Regional Economies: A synthetic control analysis," Papers in Regional Science, Wiley Blackwell, vol. 100(6), pages 1449-1479, December.
    13. Cunningham, Scott & DeAngelo, Gregory & Smith, Brock, 2020. "Fracking and risky sexual activity," Journal of Health Economics, Elsevier, vol. 72(C).
    14. Xinming Du, 2023. "Symptom or Culprit? Social Media, Air Pollution, and Violence," CESifo Working Paper Series 10296, CESifo.
    15. 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).

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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