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The Economic Impact of Shale Gas Development: A Natural Experiment along the New York / Pennsylvania Border

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  • Cosgrove, Brendan M.
  • LaFave, Daniel R.
  • Dissanayake, Sahan T. M.
  • Donihue, Michael R.

Abstract

We investigate local economic impacts of shale gas development using the natural experiment of the discontinuity in regulation caused by New York's 2008 moratorium on fracking. Using county- and zip-code-level data for 2001–2013 to examine differences in New York and Pennsylvania counties before and after the moratorium, we find that shale gas development has a positive local impact on employment and wages in the natural resource, mining, and construction sectors and an offsetting reduction in employment in the manufacturing sector. Overall, we find no statistically significant local effects on total employment or on wages.

Suggested Citation

  • Cosgrove, Brendan M. & LaFave, Daniel R. & Dissanayake, Sahan T. M. & Donihue, Michael R., 2015. "The Economic Impact of Shale Gas Development: A Natural Experiment along the New York / Pennsylvania Border," Agricultural and Resource Economics Review, Cambridge University Press, vol. 44(2), pages 20-39, August.
    • Handle: RePEc:cup:agrerw:v:44:y:2015:i:02:p:20-39_01
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    Cited by:

    1. 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.
    2. Hoy, Kyle A. & Kelsey, Timothy W. & Shields, Martin, 2017. "An Economic Impact Report of Shale Gas Extraction in Pennsylvania with Stricter Assumptions," Ecological Economics, Elsevier, vol. 138(C), pages 178-185.
    3. Marcos-Martinez, Raymundo & Measham, Thomas G. & Fleming-Muñoz, David A., 2019. "Economic impacts of early unconventional gas mining: Lessons from the coal seam gas industry in New South Wales, Australia," Energy Policy, Elsevier, vol. 125(C), pages 338-346.
    4. Melstrom, Richard T. & Lee, Kangil & Byl, Jacob P., 2018. "Do Regulations to Protect Endangered Species on Private Lands Affect Local Employment? Evidence from the Listing of the Lesser Prairie Chicken," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(3), September.
    5. Walsh, Patrick J. & Bird, Stephen & Heintzelman, Martin D., 2015. "Understanding Local Regulation of Fracking: A Spatial Econometric Approach," Agricultural and Resource Economics Review, Cambridge University Press, vol. 44(2), pages 138-163, August.
    6. Melstrom, Richard T. & Lee, Kangil & Byl, Jacob P., 2016. "The effect of endangered species regulations on local employment: Evidence from the listing of the lesser prairie chicken," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236254, Agricultural and Applied Economics Association.
    7. Ryan A. Decker & Meagan McCollum & Gregory B. Upton Jr., 2024. "Boom Town Business Dynamics," Journal of Human Resources, University of Wisconsin Press, vol. 59(2), pages 627-651.
    8. Benjamin S. Kay & Albina Khatiwoda, 2025. "Challenging Demographic Representativeness at State Borders: Implications for Policy Research," Finance and Economics Discussion Series 2025-018, Board of Governors of the Federal Reserve System (U.S.).
    9. Yassine Kirat, 2021. "The US shale gas revolution: An opportunity for the US manufacturing sector?," Post-Print hal-03676616, HAL.
    10. Kirat, Yassine, 2021. "The US shale gas revolution: An opportunity for the US manufacturing sector?," International Economics, Elsevier, vol. 167(C), pages 59-77.
    11. Hoy, Kyle A. & Xiarchos, Irene M. & Kelsey, Timothy W. & Brasier, Kathryn J. & Glenna, Leland L., 2018. "Marcellus Shale Gas Development and Farming," Agricultural and Resource Economics Review, Cambridge University Press, vol. 47(3), pages 634-664, December.
    12. Lindequist, David & Selent, Samuel, 2025. "Did shale gas green the U.S. economy?," Energy Economics, Elsevier, vol. 145(C).
    13. 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.
    14. Komarek, Timothy M., 2016. "Labor market dynamics and the unconventional natural gas boom: Evidence from the Marcellus region," Resource and Energy Economics, Elsevier, vol. 45(C), pages 1-17.
    15. 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).
    16. 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.
    17. Mayer, Adam, 2018. "The Fiscal Impacts of Energy: Perspectives from local governments in the Mountain West, USA," Energy Policy, Elsevier, vol. 122(C), pages 186-193.
    18. Burnett, J. Wesley, 2015. "FOREWORD: Unconventional Oil and Gas Development: Economic, Environmental, and Policy Analysis," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 44(2), pages 1-15, August.
    19. Wang, Haoying, 2020. "The economic impact of oil and gas development in the Permian Basin: Local and spillover effects," Resources Policy, Elsevier, vol. 66(C).
    20. Onur Sapci, 2022. "The Impact of Shale Energy on Population Dynamics, Labor Migration, and Employment," Energies, MDPI, vol. 15(22), pages 1-17, November.

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