Research / BFI Working PaperDec 20, 2016

The Local Economic and Welfare Consequences of Hydraulic Fracturing

Exploiting geological variation within shale deposits and timing in the initiation of hydraulic fracturing, this paper finds that allowing fracing leads to sharp increases in oil and gas re-covery and improvements in a wide set of economic indicators. At the same time, estimated willingness-to-pay (WTP) for the decrease in local amenities (e.g., crime and noise) is roughly equal to -$1000 to -$1,600 per household annually (-1.9% to -3.1% of mean household in-come). Overall, we estimate that WTP for allowing fracing equals about $1,300 to $1,900 per household annually (2.5% to 3.7%), although there is substantial heterogeneity across shale regions.

More Research From These Scholars

BFI Working Paper Aug 1, 2015

Toilets Can Work: Short and Medium Run Health Impacts of Addressing Complementarities and Externalities in Water and Sanitation

Michael Greenstone, Esther Duflo, Raymond Guiteras, Thomas Clasen
Topics:  Energy & Environment, Health care
BFI Working Paper Mar 25, 2020

Does Social Distancing Matter?

Michael Greenstone, Vishan Nigam
Topics:  COVID-19
BFI Working Paper Jan 1, 2015

Are the Non-Monetary Costs of Energy Efficiency Investments Large? Understanding Low Take-up of a Free Energy Efficiency Program

Michael Greenstone, Meredith Fowlie, Catherine Wolfram
Topics:  Energy & Environment, Health care