Student-Faculty Dinner Discussion, The Local Economic and Welfare Consequences of Hydraulic Fracturing – Janet Currie
Speaker: Janet Currie, Henry Putnam Professor of Economics and Public Affairs
Research led by Janet Currie has found that allowing fracking leads to sharp increases in oil and gas recovery and improvements in a wide set of economic indicators. At the same time, however, the estimated willingness-to-pay (WTP) for a decrease in local amenities (e.g., crime and noise) is roughly equal to each household losing $500 to $1,200 annually (a median household income loss of 1.3 percent to 3.1 percent). Overall, Currie and her colleagues estimate that WTP for allowing fracking equals about $1,200 to $1,900 per household annually (3.1 percent to 4.9 percent), although there is substantial heterogeneity across shale regions.