Broadening benefits from natural resource extraction: Housing values and taxation of natural gas wells as property

Jeremy Weber, James Burnett and Irene M. Xiarchos

MPRA Paper from University Library of Munich, Germany

Abstract: We study the effects of the property tax base shock caused by natural gas drilling in the Barnett Shale in Texas–a state that taxes oil and gas wells as property. Over the boom and bust in drilling, housing appreciation closely followed the oil and gas property tax base, which expanded the total tax base by 23 percent at its height. The expansion led to a decline in property tax rates while maintaining or increasing revenues to schools. Overall, each $1 per student increase in the oil and gas property tax base increased the value of the typical home by $0.15. Some evidence suggests that the cumulative density of wells nearby may lower housing values, indicating that drilling could reduce local welfare without policies to increase local public revenues.

Keywords: Shale Gas; Property Taxes; Housing Values (search for similar items in EconPapers)
JEL-codes: H71 Q32 Q33 (search for similar items in EconPapers)
Date: 2016-01-18
New Economics Papers: this item is included in nep-ene, nep-reg and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:68900

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