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 Jan 1, 2015

Will Adaptation to Climate Change be Slow and Costly? Evidence from High Temperatures and Mortality, 1900-2004

Michael Greenstone, Alan Barreca, Karen Clay, Olivier Deschenes, Joseph Shapiro
Topics:  Energy & Environment, Health care
BFI Working Paper Jan 1, 2016

Will We Ever Stop Using Fossil Fuels?

Thomas Covert, Michael Greenstone, Christopher R. Knittel
Topics:  Energy & Environment, Financial Markets, Monetary Policy, Tax & Budget, Health care
BFI Working Paper Jun 29, 2020

Can Technology Solve the Principal-Agent Problem? Evidence from China’s War on Air Pollution

Michael Greenstone, Guojun He, Ruixue Jia, Tong Liu
Topics:  Energy & Environment