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The Economic Impact of Shale Gas Development: A Natural Experiment along the New York / Pennsylvania Border

Published online by Cambridge University Press:  15 September 2016

Brendan M. Cosgrove ,
Daniel R. LaFave ,
Sahan T. M. Dissanayake  and
Michael R. Donihue
Brendan M. Cosgrove
Affiliation:
Department of Economics at Colby College
Daniel R. LaFave
Affiliation:
Department of Economics at Colby College
Sahan T. M. Dissanayake*
Affiliation:
Department of Economics at Colby College
Michael R. Donihue
Affiliation:
Department of Economics at Colby College
*
Corresponding author: Sahan T. M. Dissanayake ▪ 5230 Mayflower Hill ▪ Waterville, ME 04901–8852 ▪ Phone 217.419.0452 ▪ Email sdissan2@gmail.com.
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Abstract

We investigate local economic impacts of shale gas development using the natural experiment of the discontinuity in regulation caused by New York's 2008 moratorium on fracking. Using county- and zip-code-level data for 2001–2013 to examine differences in New York and Pennsylvania counties before and after the moratorium, we find that shale gas development has a positive local impact on employment and wages in the natural resource, mining, and construction sectors and an offsetting reduction in employment in the manufacturing sector. Overall, we find no statistically significant local effects on total employment or on wages.

Keywords

difference-in-differenceseconomic impactfrackingMarcellus shalenatural experimentshale gas development
Type
Selected Papers
Information
Agricultural and Resource Economics Review , Volume 44 , Issue 2: Special Issue: Unconventional Gas and Oil Development: Economic and Environmental Impacts , August 2015 , pp. 20 - 39
Copyright
Copyright © 2015 Northeastern Agricultural and Resource Economics Association 

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