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Long-term effects of income specialization in oil and gas extraction: The U.S. West, 1980–2011

Julia Haggerty, Patricia H. Gude, Mark Delorey and Ray Rasker

Energy Economics, 2014, vol. 45, issue C, 186-195

Abstract: The purpose of the study is to evaluate the relationships between oil and natural gas specialization and socioeconomic well-being during the period 1980 to 2011 in a large sample of counties within the six major oil- and gas-producing states in the interior U.S. West: Colorado, Montana, New Mexico, North Dakota, Utah, and Wyoming. The effects of participation in the early 1980s oil and gas boom and long-term specialization were considered as possible drivers of socioeconomic outcomes. Generalized estimating equations were used to regress 11 measures of economic growth and quality of life on oil and gas specialization while accounting for various confounding factors including degree of access to markets, initial socioeconomic conditions in 1980, and dependence on other economic sectors. Long-term oil and gas specialization is observed to have negative effects on change in per capita income, crime rate, and education rate. Participation in the early 1980s boom was positively associated with change in per capita income; however the positive effect decreases the longer counties remain specialized in oil and gas. Our findings contribute to a broader public dialogue about the consequences of resource specialization involving oil and natural gas and call into question the assumption that long-term oil and gas development confers economic advantages upon host communities.

Keywords: Oil and natural gas; Resource specialization; Economic outcomes; Western United States; Generalized estimating equations (search for similar items in EconPapers)
Date: 2014
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