This is a Free article. You will receive access to the full text.

Do Localities Benefit from Natural Resource Extraction?

Free Article

There is a strand of the economics literature that considers the regionalized economic effects of natural resource endowments. The so-called Natural Resource Curse suggests that natural resource endowments are associated with lower long-term growth rates in the areas in which the resources are located. Lower growth arises because these areas tend to specialize in the development and exploitation of the natural resources at the expense of other dynamic economic activities that offer higher long-term growth potential. Empirical evidence has, however, not reached consistent conclusions. In this paper, we take advantage of the rapid growth in oil and gas development and production in Texas over the course of a decade to consider the localized effects on inter-industry county-level employment at the NAICS-2, county-level mean and median income, and key public finance measures at both the county and school district levels. Considering the effects within a single, large and economically diverse state enables us to control for important state-level variables that influence local public finances. We find little evidence of short term effects necessary to generate the circumstance of a resource curse over the longer term.

Download Executive Summary Download PDF

Keywords: Energy, Oil and gas, Industry studies, Per capita income, Public sector revenues and expenditures

DOI: 10.5547/01956574.41.5.ddes

References: Reference information is available for this article. Join IAEE, log in, or purchase the article to view reference data.

Published in Volume 41, Number 5 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


© 2024 International Association for Energy Economics | Privacy Policy | Return Policy