American Economic Review Vol. 107 No. 4 2017

Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution

James Feyrer¹; Erin T. Mansur²; Bruce Sacerdote³

¹ Department of Economic, Dartmouth College, 6106 Rockefeller Hall, Dartmouth College, Hanover, NH 03755 (e-mail: ) · ² Tuck School of Business, Dartmouth College, 100 Tuck Hall, Dartmouth College, Hanover NH 03755, and NBER (e-mail: ) · ³ Department of Economics, Dartmouth College, 6106 Rockefeller Hall, Dartmouth College, Hanover NH 03755, and NBER (e-mail: )

Abstract

We track the geographic and temporal propagation of local economic shocks from new oil and gas production generated by hydrofracturing. Each million dollars of new production produces $80,000 in wage income and $132,000 in royalty and business income within a county. Within 100 miles, one million dollars of new production generates $257,000 in wages and $286,000 in royalty and business income. Roughly two-thirds of the wage income increase persists for two years. Assuming no general equilibrium effects, new extraction increased aggregate US employment by as many as 640,000, and decreased the unemployment rate by 0.43 during the Great Recession.

DOI

10.1257/aer.20151326

Volume

107

Issue

4

Pages

1313-1334

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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