Environmental justice and Coasian bargaining: The role of race, ethnicity, and income in lease negotiations for shale gas

Christopher Timmins and Ashley Vissing

Journal of Environmental Economics and Management, 2022, vol. 114, issue C

Abstract: Using a unique combination of datasets and estimation techniques, we test whether private lease negotiations to extract oil and natural gas exhibit features of Coasian efficiency. We demonstrate that measures of wealth (including income, house square footage, and land acreage), typically determinants of willingness to pay for environmental quality, do affect bargaining outcomes. However, race, ethnicity, and language also play important roles after conditioning upon these variables, suggesting an environmental injustice and a breakdown of efficient Coasian bargaining. We further demonstrate that failure to negotiate protections in leases leads to increased risk of future drilling violations, and that weak lease restrictions are not generally offset by strong local ordinance restrictions.

Keywords: Shale gas; Hydraulic fracturing; Mineral rights; Lease negotiation; Coasian bargaining; Environmental justice; Heterogeneous effects; Bayesian Improved Surname Geocoding; Chaid moment forest (search for similar items in EconPapers)
JEL-codes: K32 Q40 Q51 Q58 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:114:y:2022:i:c:s0095069622000353

DOI: 10.1016/j.jeem.2022.102657

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Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

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