The Local Economic and Welfare Consequences of Hydraulic Fracturing

Alexander Bartik (), Janet Currie, Michael Greenstone and Christopher R. Knittel

American Economic Journal: Applied Economics, 2019, vol. 11, issue 4, 105-55

Abstract: Exploiting geological variation and timing in the initiation of hydraulic fracturing, we find that fracking leads to sharp increases in oil and gas recovery and improvements in a wide set of economic indicators. There is also evidence of deterioration in local amenities, which may include increases in crime, noise, and traffic and declines in health. Using a Rosen-Roback-style spatial equilibrium model to infer the net welfare impacts, we estimate that willingness-to-pay (WTP) for allowing fracking equals about $2,500 per household annually (4.9 percent of household income), although WTP is heterogeneous, ranging from more than $10,000 to roughly 0 across 10 shale regions.

JEL-codes: D12 K42 L71 Q35 Q51 Q53 R41 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/app.20170487
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Citations: View citations in EconPapers (41)

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Working Paper: The Local Economic and Welfare Consequences of Hydraulic Fracturing (2017)
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