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Essays in the economics of energy development and disamenities

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  • Rakitan, Timothy John

Abstract

This dissertation consists of three essays broadly themed around evaluating the impact of energy infrastructure on local consumers and industries. Taken together, they characterize ways in which the presence of energy activity is reflected in local land and labor market conditions, with a particular focus on the deployment of wind energy generation and shale resource extraction.The first chapter examines the relationship between the placement of wind energy infrastructure and house values and incomes in Iowa. The results suggest that income growth offsets some of the negative house-value effects commonly observed in the evaluation literature, but also that income gains reported in the literature are geographically distributed away from wind farm locations. I conclude that proximity to wind turbines does not increase the real incomes of local residents.The second chapter applies a regional model to county-level wage, house value, employment and energy production data to characterize the economic impact of the U.S. shale boom of the mid-2000s. While the boom has been responsible for wage and employment gains in counties located within the bounds of U.S. shale oil and gas plays, the net effect on house values has been negative. Within the set of energy-producing counties, however, house value declines are mitigated during the boom period as willingness-to-pay for residential space can overcome some of the the negative impacts of energy industry activity. I conclude that shale energy extraction is a disamenity at the local level.The third chapter extends the analysis of the impact of the shale boom by examining possible spillovers in agriculture. Using parcel-level data from North Dakota, I analyze rental rates to assess the extent to which oil industry activity affects the returns to agricultural land. While “on-shale” parcels lease at lower rates than parcels located outside the oil fields, I cannot reject the hypothesis that proximity to an oil well has no impact on returns to agricultural land. Since my data examine agricultural surface rents with no associated mineral rights, my results imply that fracking-related house value declines reported in the literature may be due to aesthetic and nuisance considerations rather than lasting local environmental damage.

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  • Rakitan, Timothy John, 2017. "Essays in the economics of energy development and disamenities," ISU General Staff Papers 201701010800007207, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201701010800007207
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    References listed on IDEAS

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    1. Charles F. Mason & Lucija A. Muehlenbachs & Sheila M. Olmstead, 2015. "The Economics of Shale Gas Development," Annual Review of Resource Economics, Annual Reviews, vol. 7(1), pages 269-289, October.
    2. Lucija Muehlenbachs & Elisheba Spiller & Christopher Timmins, 2015. "The Housing Market Impacts of Shale Gas Development," American Economic Review, American Economic Association, vol. 105(12), pages 3633-3659, December.
    3. Gibbons, Stephen, 2015. "Gone with the wind: Valuing the visual impacts of wind turbines through house prices," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 177-196.
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    5. Hill, Elaine L., 2018. "Shale gas development and infant health: Evidence from Pennsylvania," Journal of Health Economics, Elsevier, vol. 61(C), pages 134-150.
    6. Brown, Jason P. & Fitzgerald, Timothy & Weber, Jeremy G., 2016. "Capturing rents from natural resource abundance: Private royalties from U.S. onshore oil & gas production," Resource and Energy Economics, Elsevier, vol. 46(C), pages 23-38.
    7. Douglas H. Wrenn & H. Allen Klaiber & Edward C. Jaenicke, 2016. "Unconventional Shale Gas Development, Risk Perceptions, and Averting Behavior: Evidence from Bottled Water Purchases," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(4), pages 779-817.
    8. Raymond B. Palmquist, 1989. "Land as a Differentiated Factor of Production: A Hedonic Model and Its Implications for Welfare Measurement," Land Economics, University of Wisconsin Press, vol. 65(1), pages 23-28.
    9. Burnett, J. Wesley & Weber, Jeremy G., 2014. "Is the Natural Gas Revolution all its Fracked Up to Be for Local Economies?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 29(4).
    10. Sathya Gopalakrishnan & H. Allen Klaiber, 2014. "Is the Shale Energy Boom a Bust for Nearby Residents? Evidence from Housing Values in Pennsylvania," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(1), pages 43-66.
    11. Andrew Boslett & Todd Guilfoos & Corey Lang, 2019. "Valuation of the External Costs of Unconventional Oil and Gas Development: The Critical Importance of Mineral Rights Ownership," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(3), pages 531-561.
    12. Jason Brown, 2014. "Production of natural gas from shale in local economies: a resource blessing or curse?," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 1-29.
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    Cited by:

    1. Marvin Schütt, 2024. "Wind Turbines and Property Values: A Meta-Regression Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(1), pages 1-43, January.

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