Academic journal article International Advances in Economic Research

Guidelines for Conducting Economic Impact Studies on Fracking

Academic journal article International Advances in Economic Research

Guidelines for Conducting Economic Impact Studies on Fracking

Article excerpt

Abstract In recent years, many studies have attempted to estimate the economic impact of fracking. When done properly, economic impact studies can be valuable to both policy makers and researchers. Unfortunately, the quality of these economic impact studies varies. Often times these studies are released with obvious errors or authors clearly exhibit bias either for or against fracking. In this paper, we briefly review the studies that have estimated the economic impact of fracking. We discuss many of the issues researchers face when attempting to estimate the economic impact of fracking, and provide recommendations to those who wish to conduct these studies in the future.

Keywords Economic impact * Economic impact studies * Fracking * Natural gas * Oil

JEL Q00 R10

Introduction

A properly conducted economic impact analysis can be valuable not only for its publicrelations purposes but can also be used to inform policy making decisions. It can quantify how an entity affects the economy for a defined region, and may be of interest to a number of stakeholders. Each day, new economic impact studies are released, showing the impact of universities, sports stadiums, airports, rivers, or other entities. These studies, if done well, could be useful to policy makers and other officials.

While well-conducted economic impact studies are valuable, there are some problems that are endemic to such endeavors. The lack of a peer review process may be the most obvious problem. When most academic studies are published, the drafts are first reviewed by other experts in the field. These experts are usually not known to the author and often have the power to prevent a bad paper from being published or can insist on changes to improve the paper prior to publication. At a minimum peer reviewed studies provide some level of quality control: they ensure that concepts are clarified, methodologies outlined and conclusions supported by verifiable data. With the increase in gas extraction using hydraulic fracturing (also known as fracking), there has been an increase in the production of economic impact studies studying fracking and they reflect some of the inherent problems that can arise when conducting such research.

Over the past few years, many researchers have attempted to assess the economic impact of fracking. Fracking is a technique used to fracture rock layers to extract natural gas. In the past decade, fracking has become widespread in the United States. The process is controversial. Some groups cite the benefits of this new drilling method, namely, less dependence on foreign energy and the economic boom that accompanies this operation (Tomb 2013). Other groups claim this process causes more abuse of women, traffic delays, and even more sexually transmitted infections (Schow 2013). The most common criticisms, however, deal with claims that fracking could damage the water supply and the environment. In the past few years, there have been over a dozen studies released to the public examining the economic impact of fracking. While the general guidelines on how to conduct economic impact studies should be well known, the estimates of the economic impact of fracking vary significantly.

In this paper we first discuss the scholarly work examining economic impact analysis in other fields. This will include some debates among economists and guidelines that are provided for conducting economic impact studies. We also examine the (limited number of) academic articles published related to the economic impact of fracking. We then briefly summarize the economic impact studies done on fracking in the United States. We will examine some of the issues that researchers must consider when estimating the economic impact of fracking. Some are common to all economic impact studies, while others are more specific to issues related to fracking. We also provide our recommendations for some best practices to follow when conducting an economic impact study on fracking. …

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