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

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

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

  • Alexander G. James
  • Brock Smith
American Economic Review
vol. 110, no. 6, June 2020
(pp. 1905–13)
See also: Original paper by Feyrer, Mansur, and Sacerdote (2017)
See also: Reply by Feyrer, Mansur, and Sacerdote (2020)
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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.

Citation

James, Alexander G., and Brock Smith. 2020. "Geographic Dispersion of Economic Shocks: Evidence from the Fracking Revolution: Comment." American Economic Review 110 (6): 1905–13. DOI: 10.1257/aer.20180888

Additional Materials

JEL Classification

  • E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
  • E32 Business Fluctuations; Cycles
  • J31 Wage Level and Structure; Wage Differentials
  • Q35 Hydrocarbon Resources
  • Q43 Energy and the Macroeconomy
  • R11 Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
  • R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics