IDEAS home Printed from https://ideas.repec.org/p/isu/genstf/201701010800007207.html
   My bibliography  Save this paper

Essays in the economics of energy development and disamenities

Author

Listed:
  • Rakitan, Timothy John

Abstract

This dissertation consists of three essays broadly themed around evaluating the impact of energy infrastructure on local consumers and industries. Taken together, they characterize ways in which the presence of energy activity is reflected in local land and labor market conditions, with a particular focus on the deployment of wind energy generation and shale resource extraction.The first chapter examines the relationship between the placement of wind energy infrastructure and house values and incomes in Iowa. The results suggest that income growth offsets some of the negative house-value effects commonly observed in the evaluation literature, but also that income gains reported in the literature are geographically distributed away from wind farm locations. I conclude that proximity to wind turbines does not increase the real incomes of local residents.The second chapter applies a regional model to county-level wage, house value, employment and energy production data to characterize the economic impact of the U.S. shale boom of the mid-2000s. While the boom has been responsible for wage and employment gains in counties located within the bounds of U.S. shale oil and gas plays, the net effect on house values has been negative. Within the set of energy-producing counties, however, house value declines are mitigated during the boom period as willingness-to-pay for residential space can overcome some of the the negative impacts of energy industry activity. I conclude that shale energy extraction is a disamenity at the local level.The third chapter extends the analysis of the impact of the shale boom by examining possible spillovers in agriculture. Using parcel-level data from North Dakota, I analyze rental rates to assess the extent to which oil industry activity affects the returns to agricultural land. While “on-shale” parcels lease at lower rates than parcels located outside the oil fields, I cannot reject the hypothesis that proximity to an oil well has no impact on returns to agricultural land. Since my data examine agricultural surface rents with no associated mineral rights, my results imply that fracking-related house value declines reported in the literature may be due to aesthetic and nuisance considerations rather than lasting local environmental damage.

Suggested Citation

  • Rakitan, Timothy John, 2017. "Essays in the economics of energy development and disamenities," ISU General Staff Papers 201701010800007207, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201701010800007207
    as

    Download full text from publisher

    File URL: https://dr.lib.iastate.edu/server/api/core/bitstreams/91cd2610-38ec-42b4-bc1b-f33aabf73b47/content
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Charles F. Mason & Lucija A. Muehlenbachs & Sheila M. Olmstead, 2015. "The Economics of Shale Gas Development," Annual Review of Resource Economics, Annual Reviews, vol. 7(1), pages 269-289, October.
    2. Lucija Muehlenbachs & Elisheba Spiller & Christopher Timmins, 2015. "The Housing Market Impacts of Shale Gas Development," American Economic Review, American Economic Association, vol. 105(12), pages 3633-3659, December.
    3. Dröes, Martijn I. & Koster, Hans R.A., 2016. "Renewable energy and negative externalities: The effect of wind turbines on house prices," Journal of Urban Economics, Elsevier, vol. 96(C), pages 121-141.
    4. Hill, Elaine L., 2018. "Shale gas development and infant health: Evidence from Pennsylvania," Journal of Health Economics, Elsevier, vol. 61(C), pages 134-150.
    5. Raymond B. Palmquist, 1989. "Land as a Differentiated Factor of Production: A Hedonic Model and Its Implications for Welfare Measurement," Land Economics, University of Wisconsin Press, vol. 65(1), pages 23-28.
    6. Burnett, J. Wesley & Weber, Jeremy G., 2014. "Is the Natural Gas Revolution all its Fracked Up to Be for Local Economies?," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 29(4).
    7. Jason Brown, 2014. "Production of natural gas from shale in local economies: a resource blessing or curse?," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 1-29.
    8. Komarek, Timothy M., 2016. "Labor market dynamics and the unconventional natural gas boom: Evidence from the Marcellus region," Resource and Energy Economics, Elsevier, vol. 45(C), pages 1-17.
    9. Brown, Jason P. & Fitzgerald, Timothy & Weber, Jeremy G., 2016. "Capturing rents from natural resource abundance: Private royalties from U.S. onshore oil & gas production," Resource and Energy Economics, Elsevier, vol. 46(C), pages 23-38.
    10. Gibbons, Stephen, 2015. "Gone with the wind: Valuing the visual impacts of wind turbines through house prices," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 177-196.
    11. Douglas H. Wrenn & H. Allen Klaiber & Edward C. Jaenicke, 2016. "Unconventional Shale Gas Development, Risk Perceptions, and Averting Behavior: Evidence from Bottled Water Purchases," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(4), pages 779-817.
    12. Sathya Gopalakrishnan & H. Allen Klaiber, 2014. "Is the Shale Energy Boom a Bust for Nearby Residents? Evidence from Housing Values in Pennsylvania," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(1), pages 43-66.
    13. Andrew Boslett & Todd Guilfoos & Corey Lang, 2019. "Valuation of the External Costs of Unconventional Oil and Gas Development: The Critical Importance of Mineral Rights Ownership," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(3), pages 531-561.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marvin Schütt, 2024. "Wind Turbines and Property Values: A Meta-Regression Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(1), pages 1-43, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kangil Lee & Brian Whitacre, 2021. "A Study on the Impact of Unconventional (and Conventional) Drilling on Housing Prices in Central Oklahoma," Sustainability, MDPI, vol. 13(24), pages 1-17, December.
    2. Fleming, David & Komarek, Timothy & Partridge, Mark & Measham, Thomas, 2015. "The Booming Socioeconomic Impacts of Shale: A Review of Findings and Methods in the Empirical Literature," MPRA Paper 68487, University Library of Munich, Germany.
    3. Hess, Joshua H. & Manning, Dale T. & Iverson, Terry & Cutler, Harvey, 2019. "Uncertainty, learning, and local opposition to hydraulic fracturing," Resource and Energy Economics, Elsevier, vol. 55(C), pages 102-123.
    4. Jason P. Brown & Timothy Fitzgerald & Jeremy G. Weber, 2019. "Does Resource Ownership Matter? Oil and Gas Royalties and the Income Effect of Extraction," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(6), pages 1039-1064.
    5. Jason P. Brown, 2021. "Response of Consumer Debt to Income Shocks: The Case of Energy Booms and Busts," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 53(7), pages 1629-1675, October.
    6. Katie Jo Black & Shawn J. McCoy & Jeremy G. Weber, 2018. "When Externalities Are Taxed: The Effects and Incidence of Pennsylvania’s Impact Fee on Shale Gas Wells," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 5(1), pages 107-153.
    7. Hoy, Kyle A. & Wrenn, Douglas H., 2018. "Unconventional energy, taxation, and interstate welfare: An analysis of Pennsylvania's severance tax policy," Energy Economics, Elsevier, vol. 73(C), pages 53-65.
    8. Cronshaw, Ian & Grafton, R. Quentin, 2016. "Economic benefits, external costs and the regulation of unconventional gas in the United States," Energy Policy, Elsevier, vol. 98(C), pages 180-186.
    9. Grant D. Jacobsen, 2019. "Who Wins In An Energy Boom? Evidence From Wage Rates And Housing," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 9-32, January.
    10. Hill, Elaine L. & Ma, Lala, 2022. "Drinking water, fracking, and infant health," Journal of Health Economics, Elsevier, vol. 82(C).
    11. Catherine Hausman & Ryan Kellogg, 2015. "Welfare and Distributional Implications of Shale Gas," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(1 (Spring), pages 71-139.
    12. 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.
    13. Rickman, Dan & Wang, Hongbo, 2020. "What goes up must come down? The recent economic cycles of the four most oil and gas dominated states in the US," Energy Economics, Elsevier, vol. 86(C).
    14. Keeler, Zachary T. & Stephens, Heather M., 2020. "Valuing shale gas development in resource-dependent communities," Resources Policy, Elsevier, vol. 69(C).
    15. Kim, Byung-Cheol & Oliver, Matthew E., 2017. "Taming drillers through legislative action: Evidence from Pennsylvania’s shale gas industry," Resource and Energy Economics, Elsevier, vol. 50(C), pages 15-35.
    16. Jeremy G. Weber & J. Wesley Burnett & Irene M. Xiarchos, 2016. "Broadening Benefits from Natural Resource Extraction: Housing Values and Taxation of Natural Gas Wells as Property," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 35(3), pages 587-614, June.
    17. Karen Maguire & John V. Winters, 2017. "Energy Boom and Gloom? Local Effects of Oil and Natural Gas Drilling on Subjective Well†Being," Growth and Change, Wiley Blackwell, vol. 48(4), pages 590-610, December.
    18. Rickman, Dan S. & Wang, Hongbo, 2018. "What Goes Up Must Come Down? A Case Study of the Recent Oil and Gas Employment Cycle in Louisiana, North Dakota and Oklahoma," MPRA Paper 87252, University Library of Munich, Germany.
    19. Maniloff, Peter & Mastromonaco, Ralph, 2017. "The local employment impacts of fracking: A national study," Resource and Energy Economics, Elsevier, vol. 49(C), pages 62-85.
    20. Hoy, Kyle A. & Xiarchos, Irene M. & Kelsey, Timothy W. & Brasier, Kathryn J. & Glenna, Leland L., 2018. "Marcellus Shale Gas Development and Farming," Agricultural and Resource Economics Review, Cambridge University Press, vol. 47(3), pages 634-664, December.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:isu:genstf:201701010800007207. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Curtis Balmer (email available below). General contact details of provider: https://edirc.repec.org/data/deiasus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.