The local economic and welfare consequences of hydraulic fracturing

Alexander W. Bartik, Janet Currie, Michael Greenstone, Christopher R. Knittel

Research output: Contribution to journalArticle

4 Scopus citations

Abstract

Exploiting geological variation and timing in the initiation of hydraulic fracturing, we find that fracking leads to sharp increases in oil and gas recovery and improvements in a wide set of economic indicators. There is also evidence of deterioration in local amenities, which may include increases in crime, noise, and traffic and declines in health. Using a Rosen-Roback-style spatial equilibrium model to infer the net welfare impacts, we estimate that willingness-to-pay (WTP) for allowing fracking equals about $2,500 per household annually (4.9 percent of household income), although WTP is heterogeneous, ranging from more than $10,000 to roughly 0 across 10 shale regions.

Original languageEnglish (US)
Pages (from-to)105-155
Number of pages51
JournalAmerican Economic Journal: Applied Economics
Volume11
Issue number4
DOIs
StatePublished - Oct 1 2019

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

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