Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution
James Feyrer, Erin T. Mansur, Bruce Sacerdote
American Economic Review · 2017 · Volume 107 · Issue 4
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.
Keywords
Economics of Contract: Theory, Transactional Relationships, Contracts and Reputation, Networks, Retail and Wholesale Trade, e-Commerce, Entertainment, Media
Enable JavaScript for citation tools and additional paper interactions.