What can we learn about shale gas development from land values? Opportunities, challenges, and evidence from Texas and Pennsylvania

Jeremy Weber and Claudia Hitaj

No 170596, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: We glean information about shale gas development by studying farm real estate values over time. Looking at the Barnett Shale (Texas) and the northeastern part of the Marcellus Shale (Pennsylvania and New York), we find that development caused appreciation in both areas but the effect was much larger in the Marcellus. There, quantile regressions reveal that farms at the 50th and 75th quantiles experienced substantial appreciation, suggesting broader ownership of oil and gas rights by surface owners. In both regions, most appreciation occurred when land was leased for drilling, not when drilling and production boomed. The higher values then persisted through the last year of our study, 2012, indicating a net positive effect of shale gas development on landed properties. Compared to agriculturally-intensive farms, the effect of development was greater for farms with limited agricultural sales and whose owners had a primary occupation other than farming. A correlation between farm type and the presence of oil and gas rights may explain the difference, a possibility that underscores the value of information on oil and gas right ownership when studying the effect of shale gas development on property values.

Keywords: Land Economics/Use; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 31
Date: 2014-05
New Economics Papers: this item is included in nep-agr and nep-ene
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Related works:
Journal Article: What Can We Learn about Shale Gas Development from Land Values? Opportunities, Challenges, and Evidence from Texas and Pennsylvania (2015)
Journal Article: What Can We Learn about Shale Gas Development from Land Values? Opportunities, Challenges, and Evidence from Texas and Pennsylvania (2015)
Working Paper: What can we learn about shale gas development from land values? Opportunities, challenges, and evidence from Texas and Pennsylvania (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:170596

DOI: 10.22004/ag.econ.170596

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