IDEAS home Printed from https://ideas.repec.org/p/ala/wpaper/2018-02.html
   My bibliography  Save this paper

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

Author

Listed:
  • Alexander James

    (Department of Economics and Public Policy, University of Alaska Anchorage)

  • Brock Smith

    (Department of Agricultural Economics and Economics, Montana State University)

Abstract

In the mid 2000s, shale-energy-rich U.S. counties experienced a sudden and significant economic shock resulting from energy extraction. While the resulting localized economic effects are relatively well understood, less is known about the geographic dispersion of the effects. We build upon an existing literature, most notably Feyrer, Mansur, and Sacerdote (2017), by examining the conditional economic effects of nearby energy production. Because energy-producing counties tend to be located near each other, producing counties experience inward economic spillovers from other nearby producing counties and this inflates the estimated effect of own-county production. Accounting for this, we identify smaller income effects of hydrocarbon production than Feyrer, Mansur, and Sacerdote (2017), limited to counties within 60-80 miles of the source of production. The proposed estimation strategy can be applied more generally to estimate the dispersion of multiple, simultaneously occurring economic shocks.

Suggested Citation

  • Alexander James & Brock Smith, 2018. "The Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution: Comment," Working Papers 2018-02, University of Alaska Anchorage, Department of Economics.
    • Handle: RePEc:ala:wpaper:2018-02
    as

    Download full text from publisher

    File URL: http://www.econpapers.uaa.alaska.edu/RePEC/ala/wpaper/ALA201802.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    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.
    2. 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.
    3. 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.
    4. Johanna Richter & Alliana Salanguit & Alexander James, 2018. "The (Uneven) Spatial Distribution of the Bakken Oil Boom," Land Economics, University of Wisconsin Press, vol. 94(4), pages 577-592.
    5. Maniloff, Peter & Mastromonaco, Ralph, 2017. "The local employment impacts of fracking: A national study," Resource and Energy Economics, Elsevier, vol. 49(C), pages 62-85.
    6. 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.
    7. Guy Michaels, 2011. "The Long Term Consequences of Resource‐Based Specialisation," Economic Journal, Royal Economic Society, vol. 121(551), pages 31-57, March.
    8. James Feyrer & Erin T. Mansur & Bruce Sacerdote, 2017. "Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution," American Economic Review, American Economic Association, vol. 107(4), pages 1313-1334, April.
    9. 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.
    10. Jason Brown & Timothy Fitzgerald & Jeremy G. Weber, 2016. "Asset Ownership, Windfalls, and Income: Evidence from Oil and Gas Royalties," Research Working Paper RWP 16-12, Federal Reserve Bank of Kansas City.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fei Jin & Lung‐fei Lee & Kai Yang, 2024. "Best linear and quadratic moments for spatial econometric models with an application to spatial interdependence patterns of employment growth in US counties," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 39(4), pages 640-658, June.
    2. Michael Pollmann, 2020. "Causal Inference for Spatial Treatments," Papers 2011.00373, arXiv.org, revised Jan 2023.
    3. Chor, Davin & Li, Bingjing, 2024. "Illuminating the effects of the US-China tariff war on China’s economy," Journal of International Economics, Elsevier, vol. 150(C).
    4. 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).
    5. 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.
    6. Zhang, Haoran, 2023. "Coal busts and urban recovery: Evidence from China," Regional Science and Urban Economics, Elsevier, vol. 101(C).
    7. Fabra, Natalia & Gutiérrez, Eduardo & Lacuesta, Aitor & Ramos, Roberto, 2024. "Do renewable energy investments create local jobs?," Journal of Public Economics, Elsevier, vol. 239(C).
    8. 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).
    9. 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).
    10. Boslett, Andrew & Hill, Elaine, 2022. "Mortality during resource booms and busts," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    11. 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.
    12. Natalia Fabra & Eduardo Gutiérrez & Aitor Lacuesta & Roberto Ramos, 2023. "Do Renewables Create Local Jobs?," Working Papers 2307, Banco de España.
    13. Rodríguez-Puello, Gabriel & Rickardsson, Jonna, 2024. "Spatial Diffusion of Economic Shocks in the Labor Market: Evidence from a Mining Boom and Bust," OSF Preprints tzmf2, Center for Open Science.
    14. 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.
    15. repec:osf:osfxxx:tzmf2_v1 is not listed on IDEAS
    16. Eife, Thomas, 2020. "The General Equilibrium Effects of the Shale Revolution," Working Papers 0694, University of Heidelberg, Department of Economics.
    17. 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.
    18. Cunningham, Scott & DeAngelo, Gregory & Smith, Brock, 2020. "Fracking and risky sexual activity," Journal of Health Economics, Elsevier, vol. 72(C).
    19. Xinming Du, 2023. "Symptom or Culprit? Social Media, Air Pollution, and Violence," CESifo Working Paper Series 10296, CESifo.
    20. 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).

    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. 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).
    2. 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).
    3. Abboud, Ali & Betz, Michael R., 2021. "The local economic impacts of the oil and gas industry: Boom, bust and resilience to shocks," Energy Economics, Elsevier, vol. 99(C).
    4. Watson, Brett & Reimer, Matthew N. & Guettabi, Mouhcine & Haynie, Alan, 2021. "Commercial fisheries & local economies," Journal of Environmental Economics and Management, Elsevier, vol. 106(C).
    5. 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.
    6. 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).
    7. Jason P. Brown, 2021. "Response of Consumer Debt to Income Shocks: The Case of Energy Booms and Busts," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 53(7), pages 1629-1675, October.
    8. Rodríguez-Puello, Gabriel & Rickardsson, Jonna, 2024. "Spatial Diffusion of Economic Shocks in the Labor Market: Evidence from a Mining Boom and Bust," OSF Preprints tzmf2, Center for Open Science.
    9. Susan Amiesa Fubara & Omowumi O. Iledare & Obindah Gershon & Jeremiah Ejemeyovwi, 2019. "Natural Resource Extraction and Economic Performance of the Niger Delta Region in Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 9(4), pages 188-193.
    10. Cai, Zhengyu & Maguire, Karen & Winters, John V., 2019. "Who benefits from local oil and gas employment? Labor market composition in the oil and gas industry in Texas and the rest of the United States," Energy Economics, Elsevier, vol. 84(C).
    11. 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.
    12. Jaimes, Richard & Gerlagh, Reyer, 2020. "Resource-richness and economic growth in contemporary U.S," Energy Economics, Elsevier, vol. 89(C).
    13. Gittings, R. Kaj & Roach, Travis, 2020. "Who Benefits from a Resource Boom? Evidence from the Marcellus and Utica Shale Plays," Energy Economics, Elsevier, vol. 87(C).
    14. 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.
    15. 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.
    16. 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.
    17. 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.
    18. 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.
    19. Keeler, Zachary T. & Stephens, Heather M., 2020. "Valuing shale gas development in resource-dependent communities," Resources Policy, Elsevier, vol. 69(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.

    More about this item

    Keywords

    Economic Shocks; Regional Development; Economic Propagation;
    All these keywords.

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:ala:wpaper:2018-02. 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: Jonathan Alevy (email available below). General contact details of provider: https://edirc.repec.org/data/ecuaaus.html .

    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.