The local economic and welfare consequences of hydraulic fracturing

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

Research output: Contribution to journalArticlepeer-review

11 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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