The Local Economic and Welfare Consequences of Demand Shocks for Coal Country

Daniel Kraynak

No 388972, National Center for Environmental Economics-NCEE Working Papers from United States Environmental Protection Agency (EPA)

Abstract: This paper estimates the welfare costs of declining coal demand from the power sector on coal mining regions of the US. Using an instrumental variable derived from a stylized model of the electricity sector, I estimate that coal producers shed jobs and wages primarily in coal mining and adjacent industries. In-migration, home values, and public education expenditures also decline. Applied in a spatial equilibrium framework, my estimates imply about $0.85 billion in costs to coal country residents resulting from a net decline of $8.03 billion in thermal coal production value from 2007-2017.

Keywords: Environmental Economics and Policy; Labor and Human Capital (search for similar items in EconPapers)
Pages: 56
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nceewp:388972

DOI: 10.22004/ag.econ.388972

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