Date of Award:

5-2016

Document Type:

Thesis

Degree Name:

Master of Science (MS)

Department:

Applied Economics

Committee Chair(s)

Paul M. Jakus

Committee

Paul M. Jakus

Committee

Therese C. Grijalva

Committee

Man-Keun Kim

Committee

Donald Snyder

Abstract

Advances in drilling technology and resource prices contributed to a boom in oil and natural gas production in the Western U.S. in the first decade of the 2000s. Following the boom, a strain of state-level legislation emerged calling for the transfer of federal lands to the states. A justification for the proposed transfers is the claim that state management will increase oil and gas production, resulting in improved economic outcomes. However, a substantial literature indicates that dependence on mineral wealth can be a problematic development strategy which may result in slower economic growth and other undesirable socioeconomic outcomes. The role of institutional and private ownerships of mineral resources has not been systematically examined in this literature. This study helps fill the gap in the literature and contributes to the debate over public land management choices by examining the effects of institutional ownerships associated with areas of oil and gas abundance on county wages in the Intermountain West.

The objectives of the study were twofold. First, geological variation in oil and gas abundance was used to examine long-term effects on county wage levels and short-term effects on wage growth from 1990 to 2010. Second, land ownership data was used to classify areas of oil and gas abundance into federal (Forest Service and Bureau of Land Management), state, and private ownership categories to test for significantly differing effects on wages across ownership types.

Results indicate that overall oil and gas abundance had a positive impact on wage levels and growth rates in the region, while institutional ownership categories were associated with significantly differing wage effects. State ownership was usually associated with higher wage levels and growth rates than federal ownership, likely due to a lengthy permitting process for drilling on federal lands. Private ownership had insignificant effects on local wages, likely due to absentee ownership. The results provide no evidence of a ‘curse of natural resources’ in the region and lend a modicum of support to state land transfer bills.

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