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The Blessing of Natural Resources: Evidence from a Peruvian Gold Mine

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Author Info

  • Aragon, Fernando

    (London School of Economics and Political Science)

  • Rud, Juan

    (University of London)

Abstract

This paper studies the impact of Yanacocha, a large gold mine in Peru, on the local population. Using annual household data from 1997 to 2006, we nd robust evidence of a positive effect of the mine's demand of local inputs on real income. The effect, an average income increase of 1.7% per 10% additional mine's purchases, is only present in the mine's supply market and surrounding areas. We also nd evidence of improvements on measures of welfare and reduction of poverty. We examine and rule out that our results are driven by increased public expenditure associated to the mining revenue windfall. Using a spatial general equilibrium model, we interpret these results as evidence of net welfare gains generated by the mine's backward linkages and its multiplier effect.

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Bibliographic Info

Paper provided by Banco Central de Reserva del Perú in its series Working Papers with number 2009-014.

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Date of creation: Dec 2009
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Handle: RePEc:rbp:wpaper:2009-015

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Keywords: Natural resources; mining; local development;

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References

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  1. Moretti, Enrico, 2004. "Bidding for Industrial Plants: Does Winning a 'Million Dollar Plant' Increase Welfare?," Santa Cruz Department of Economics, Working Paper Series qt5cz0h23t, Department of Economics, UC Santa Cruz.
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  5. Juana R. Kuramoto, 2000. "Las aglomeraciones productivas alrededor de la minería: el caso de la minera Yanacocha S.A," Documentos de Investigación dt27, Grupo de Análisis para el Desarrollo (GRADE).
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Cited by:
  1. Raveh, Ohad, 2010. "Dutch Disease, Factor Mobility Costs, and the ‘Alberta Effect’ – The Case of Federations," MPRA Paper 29662, University Library of Munich, Germany.
  2. Mathieu Couttenier & Marc Sangnier, 2012. "Living in the Garden of Eden: Mineral Resources Foster Individualism," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 12.05, Université de Lausanne, Faculté des HEC, DEEP.
  3. repec:hal:wpaper:halshs-00564920 is not listed on IDEAS
  4. De Silva, Dakshina G. & McComb, Robert P. & Schiller, Anita R., 2013. "What blows in with the wind?," MPRA Paper 51915, University Library of Munich, Germany.
  5. Raveh, Ohad, 2010. "Dutch disease, factor mobility costs, and the ‘Alberta Effect’ – The case of Federations," MPRA Paper 31744, University Library of Munich, Germany, revised Jun 2011.
  6. James CUST & Ridwan D. RUSLI, 2014. "The economic spillovers from resource extraction: a partial resource blessing at the subnational level?," Economic Growth centre Working Paper Series 1402, Nanyang Technolgical University, School of Humanities and Social Sciences, Economic Growth centre.
  7. Idrobo Nicolás & Mejía Daniel & Tribin Ana María, 2014. "Illegal Gold Mining and Violence in Colombia," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 20(1), pages 83-111, January.

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