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The Local Economic and Welfare Consequences of Hydraulic Fracturing


  • Alexander W. Bartik
  • Janet Currie
  • Michael Greenstone
  • Christopher R. Knittel


Exploiting geological variation within shale deposits and timing in the initiation of hydraulic fracturing, this paper finds that allowing fracing leads to sharp increases in oil and gas recovery and improvements in a wide set of economic indicators. At the same time, estimated willingness-to-pay (WTP) for the decrease in local amenities (e.g., crime and noise) is roughly equal to -$1000 to -$1,600 per household annually (-1.9% to -3.1% of mean household income). Overall, we estimate that WTP for allowing fracing equals about $1,300 to $1,900 per household annually (2.5% to 3.7%), although there is substantial heterogeneity across shale regions.

Suggested Citation

  • Alexander W. Bartik & Janet Currie & Michael Greenstone & Christopher R. Knittel, 2017. "The Local Economic and Welfare Consequences of Hydraulic Fracturing," NBER Working Papers 23060, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23060
    Note: EEE

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    References listed on IDEAS

    1. Boslett, Andrew & Guilfoos, Todd & Lang, Corey, 2016. "Valuation of expectations: A hedonic study of shale gas development and New York’s moratorium," Journal of Environmental Economics and Management, Elsevier, vol. 77(C), pages 14-30.
    2. David Albouy, 2008. "Are Big Cities Bad Places to Live? Estimating Quality of Life across Metropolitan Areas," NBER Working Papers 14472, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Gabriel E. Lade & Ivan Rudik, 2017. "Costs of Inefficient Regulation: Evidence from the Bakken," NBER Working Papers 24139, National Bureau of Economic Research, Inc.
    2. Melissa S. Kearney & Riley Wilson, 2017. "Male Earnings, Marriageable Men, and Nonmarital Fertility: Evidence from the Fracking Boom," NBER Working Papers 23408, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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