Environmental Justice and Coasian Bargaining: The Role of Race and Income in Lease Negotiations for Shale Gas

Christopher Timmins and Ashley Vissing

No 29487, NBER Working Papers from National Bureau of Economic Research, Inc

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, which are not offset by local ordinance restrictions.

JEL-codes: K32 Q40 Q51 Q58 (search for similar items in EconPapers)
Date: 2021-11
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
Note: EEE
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Published as Christopher Timmins & Ashley Vissing, 2022. "Environmental justice and Coasian bargaining: The role of race, ethnicity, and income in lease negotiations for shale gas," Journal of Environmental Economics and Management, .

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