Regional Economic Impacts of the Shale Gas and Tight Oil Boom: A Synthetic Control Analysis

Abdul Munasib and Dan Rickman

MPRA Paper from University Library of Munich, Germany

Abstract: The dramatic increase in oil and gas production from shale formations has led to intense interest in its impact on local area economies. Exploration, drilling and extraction are associated with direct increases in employment and income in the energy industry, but little is known about the impacts on other parts of local economies. Increased energy sector employment and income can have positive spillover effects through increased purchases of intermediate goods and induced local spending. Negative spillover effects can occur through rising local factor and goods prices and adverse effects on the local area quality of life. Therefore, this paper examines the net economic impacts of oil and gas production from shale formations for key shale oil and gas producing areas in Arkansas, North Dakota and Pennsylvania. The synthetic control method (Abadie and Gardeazabal 2003; Abadie et al., 2010) is used to establish a baseline projection for the local economies in the absence of increased energy development, allowing for estimation of the net regional economic effects of increased shale oil and gas production.

Keywords: Shale gas; Shale oil; Synthetic control method (search for similar items in EconPapers)
JEL-codes: Q33 R11 (search for similar items in EconPapers)
Date: 2014-07-27
New Economics Papers: this item is included in nep-ene, nep-lma and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Regional economic impacts of the shale gas and tight oil boom: A synthetic control analysis (2015)
Working Paper: Regional Economic Impacts of the Shale Gas and Tight Oil Boom: A Synthetic Control Analysis (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:57681

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