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

Author

Listed:
  • Abdul Munasib

    (University of Georgia)

  • Dan S. Rickman

    (Oklahoma State University)

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.

Suggested Citation

  • Abdul Munasib & Dan S. Rickman, 2014. "Regional Economic Impacts of the Shale Gas and Tight Oil Boom: A Synthetic Control Analysis," Economics Working Paper Series 1410, Oklahoma State University, Department of Economics and Legal Studies in Business.
  • Handle: RePEc:okl:wpaper:1410
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    File URL: https://business.okstate.edu/site-files/docs/ecls-working-papers/OKSWPS1410.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    regional economic development; energy boom; regional science; economic geography;
    All these keywords.

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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