Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution: Comment

Abstract

Feyrer, Mansur, and Sacerdote (2017) estimates the spatial dispersion of the effects of the recent shale-energy boom by unconditionally regressing income and employment on energy production at various levels of geographic aggregation. However, producing counties tend to be located near each other and receive inward spillovers from neighboring production. This inflates the estimated effect of own-county production and spatial aggregation does not address this. We propose an alternative estimation strategy that accounts for these spillovers and identify reduced propagation effects. The proposed estimation strategy can be applied more generally to estimate the dispersion of multiple, simultaneously occurring economic shocks. (JEL E24, E32, J31, Q35, Q43, R11, R23)

Does Resource Ownership Matter? Oil and Gas Royalties and the Income Effect of Extraction

“…Despite dropping many counties with substantial variation in royalty income, the multiplier estimates remain very similar to those from the full sample. Several studies show that the economic effects of a resource extraction can propagate beyond the county where extraction occurs (Feyrer et al 2017;James and Smith 2019). We probe our multiplier estimates in several ways to see if they are affected by accounting for spillovers.…”

Fracking and risky sexual activity

“…Empirical evidence on how major male in-migrations impact risky sexual activity includes Mao et al (2018) and Cunningham and Kendall (2011), though strong causal evidence for a persistent shock to sex ratios remains elusive. James and Smith (2017) found that the fracking boom increased county-level sex ratios, but the average magnitude was quite small. However, this estimate was an average based on all 204 counties lying over a booming fracking play (the same baseline treatment group used in this study), most of which likely did not experience severe fracking labor shortages, which could make the average uninformative.…”

“…Kearney and Wilson (2018) find positive effects on birth rates, consistent with children being a normal good. A number of papers have found large increases in both property and violent crime rates (James and Smith, 2017;Andrews and Deza, 2018;Komarek, 2018;Street, 2019).…”

“…STIs cost the American health care system an estimated $16 billion in direct medical costs annually (Satterwhite, 2013). We estimate the causal effect of fracking booms on three bacterial STIs using a county-level semi-parametric difference-in-differences model similar to James and Smith (2017), where the treatment group is defined as any county lying over a booming shale play to exploit exogenous geographic variation. We find that fracking caused county-level gonorrhea rates to increase by 16.1 cases per 100,000 people as of 2013 (which is roughly 24% of the sample mean).…”

“…Because the fracking boom impacted communities in a myriad of ways, isolating any one mechanism of effects on risky sexual activity is difficult. Fracking booms draw males that are on average less educated (Cascio and Narayan, 2015) or more likely to have criminal backgrounds (James and Smith, 2017). Increased incomes could impact prostitution activity if prostitution is a normal good.…”