Location: 368A Heady Hall

Description: Jeremy Weber
"Asset Ownership, Windfalls, and Income: Evidence from Oil and Gas Royalties"

Abstract: Increased drilling and higher energy prices caused the value of oil and gas production in the continental U.S. to increase by roughly $140 billion from 2009 to 2014. The growth generated billions in additional royalty income for owners of oil and gas rights throughout the country. We estimate that each dollar in unanticipated royalty income led to a $1.52 increase in total income, suggesting that royalty payments and government spending have similar multiplier effects. For the average county experiencing a production increase over the study period, royalty income and its multiplier effect accounted for more than two-thirds of the total increase in per capita income between 2000 and 2013. The estimates help explain why the effects of resource extraction may vary substantially across regions based on historical patterns of resource ownership.

Contact Person: Wendong Zhang