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Is there a subnational resource curse? Evidence from households in the Niger Delta region of Nigeria

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  • Animashaun, Jubril
  • Emediegwu, Lotanna E.

Abstract

Previous evidence suggests that mining-based extractive sectors have a net positive effect on local economies, further improving the local population’s living standards. In contrast to artisanal mining, we argue that hydrocarbon-based industries can have ambiguous implications on demand in sectors that will enhance local welfare. Using annual household data from the Niger Delta between 2010 and 2016, we utilize a combination of fixed effects and difference-in-differences, triple—differences (DDD), and treatment boundaries in oil production and households’ locations to produce unbiased estimates. Estimating at a subnational level allows us to exploit variation within a country, control for more potential sources of estimation bias, and measure the impact of compositional changes on households’ expenditures. We find that costs of living are higher by proximity to oil fields, but the mechanism is via the vicinity preferences for education. We find inconclusive evidence on other welfare indicators; limited employment opportunities and rent-seeking environment may explain the weak backward linkages and potential positive spillovers.

Suggested Citation

  • Animashaun, Jubril & Emediegwu, Lotanna E., 2025. "Is there a subnational resource curse? Evidence from households in the Niger Delta region of Nigeria," Resources Policy, Elsevier, vol. 101(C).
  • Handle: RePEc:eee:jrpoli:v:101:y:2025:i:c:s0301420725000066
    DOI: 10.1016/j.resourpol.2025.105464
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    More about this item

    Keywords

    Natural resources; Oil and gas; Education; Living standards; Local development;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • I2 - Health, Education, and Welfare - - Education
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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