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Determinants of earthquake damage liability assignment in Oklahoma: A Bayesian Tobit censored approach

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  • Ng'ombe, John N.
  • Boyer, Tracy A.

Abstract

Scientific evidence suggests earthquakes occurring in Oklahoma since 2009 are not “acts of God”, but very likely triggered by wastewater injection in disposal wells by oil and gas (O&G) companies. While sustaining the O&G industry's contribution to the economy is generally important, achieving environmental and public protection may in part rely on how earthquake inducers are held liable for damage. We use a Bayesian Tobit censored model, estimated using Markov Chain Monte Carlo (MCMC) methods to determine factors that influence public preferences for how much liability O&G companies should assume for induced earthquake-related damage. Data are from a survey of Oklahomans collected in 2017 by Survey Sampling International (SSI). Results suggest people would, on average, hold O&G companies liable for 75% of the earthquake damage. We find socio-demographic, earthquake, locational, and O&G industry-related factors as the main drivers of earthquake damage liability. However, their effects on damage liability vary between respondents that have had their property damaged by earthquakes and those that in some way benefit from O&G companies through jobs and gas-leases. We provide insights by which individuals might lobby representatives to impose new liability or regulatory mechanisms on O&G companies to avoid or compensate for earthquake damage.

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  • Ng'ombe, John N. & Boyer, Tracy A., 2019. "Determinants of earthquake damage liability assignment in Oklahoma: A Bayesian Tobit censored approach," Energy Policy, Elsevier, vol. 131(C), pages 422-433.
    • Handle: RePEc:eee:enepol:v:131:y:2019:i:c:p:422-433
    DOI: 10.1016/j.enpol.2019.05.013
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    1. Ng'ombe, John, 2019. "Economics of the Greenseeder Hand Planter, Discrete Choice Modeling, and On-Farm Field Experimentation," Thesis Commons jckt7_v1, Center for Open Science.
    2. Joohun Han & John N. Ng’ombe, 2023. "The relation between wheat, soybean, and hemp acreage: a Bayesian time series analysis," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-12, December.
    3. Apergis, Nicholas & Mustafa, Ghulam & Dastidar, Sayantan Ghosh, 2021. "An analysis of the impact of unconventional oil and gas activities on public health: New evidence across Oklahoma counties," Energy Economics, Elsevier, vol. 97(C).
    4. Tong Wu & Shida Rastegari Henneberry & John N. Ng’ombe & Richard T. Melstrom, 2020. "Chinese Demand for Agritourism in Rural America," Sustainability, MDPI, vol. 12(7), pages 1-11, April.
    5. Ng'ombe, John, 2019. "Economics of the Greenseeder Hand Planter, Discrete Choice Modeling, and On-Farm Field Experimentation," Thesis Commons jckt7, Center for Open Science.
    6. Nicholas Apergis & Sayantan Ghosh Dastidar & Ghulam Mustafa, 2021. "Fracking and Asset Prices: The Role of Health Indicators for House Prices Across Oklahoma’s Counties," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 154(2), pages 583-602, April.

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