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The Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution: Comment

Alexander James and Brock Smith ()

No 2018-02, Working Papers from University of Alaska Anchorage, Department of Economics

Abstract: In the mid 2000s, shale-energy-rich U.S. counties experienced a sudden and significant economic shock resulting from energy extraction. While the resulting localized economic effects are relatively well understood, less is known about the geographic dispersion of the effects. We build upon an existing literature, most notably Feyrer, Mansur, and Sacerdote (2017), by examining the conditional economic effects of nearby energy production. Because energy-producing counties tend to be located near each other, producing counties experience inward economic spillovers from other nearby producing counties and this inflates the estimated effect of own-county production. Accounting for this, we identify smaller income effects of hydrocarbon production than Feyrer, Mansur, and Sacerdote (2017), limited to counties within 60-80 miles of the source of production. The proposed estimation strategy can be applied more generally to estimate the dispersion of multiple, simultaneously occurring economic shocks.

Keywords: Economic Shocks; Regional Development; Economic Propagation (search for similar items in EconPapers)
JEL-codes: L14 L81 Q33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-geo and nep-ure
Date: 2018-02
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