ABSTRACT
The economics literature on the shale boom suggests that there are substantial benefits, and few offsetting costs. The available evidence suggests that shale production has improved the economy in areas with the most shale production. The presence of externalities are certainly relevant economic consequences that, if present, can make society worse off because of a shale boom. Shale gas development can cause earthquakes through two channels: the process of fracturing itself, or changes in the geology due to saturation. Shale gas development often brings large influxes of workers, including in some instances “man camps” with temporary housing for workers. The state’s reinvestment requirement protects communities from a “competition to the bottom” to offer low property tax rates and ensures local governments benefit from shale production. There are several features of the US institutional matrix that help to understand how the USA seems to have avoided a resource curse as a result of the boom in shale production.
