Hydraulic Fracturing and Agricultural Productivity: Evidence from California
Class
Article
College
College of Agriculture and Applied Sciences
Department
Applied Economics Department
Presentation Type
Oral Presentation
Abstract
In this study, we investigate the effect of hydraulic fracturing on agricultural productivity in the state of California, which is the United States' leading agricultural as well as unconventional oil/gas mining state. According to multiple news reports (e.g., CBS and the New York Times), the Central Valley farmers have started to notice a decline in their agricultural production since 2009 (roughly corresponding to the Shale Boom period), which the local farmers have vehemently attributed to the pollution of irrigation water as a result of the nearby fracking activities. In particular, the farmers' water tests allegedly showed that their irrigation water contained the very same chemical compounds found in the wastewater produced by oil wells. To understand whether the (under-regulated) discharge of wastewater from fracking activities generates any measurable negative externalities for agricultural production, we examine yield per acre of major crops in counties with and without fracking activities, treating 2009 and onwards as the treatment (alleged water contamination) period. Our identification strategy relies on computing the plausible counterfactual for each fracking county by constructing synthetic controls (Abadie, Diamond, and Hainmueller, 2010). This methodology allows to compare the post-treatment crop yield trajectory of a treated county with the trajectory of a weighted combination of similar but untreated counties. Our results from the synthetic control as well as difference-in-differences analyses consistently show that there is no statistically significant effect of fracking activities on county-level crop yield. We do not claim that hydraulic fracturing has not had effects on individual farms that comprise a county economy. The analysis presented here suggests that such effects of fracking wash out over a relatively small geographic area Reference: Alberto Abadie, Alexis Diamond, and Jens Hainmueller (2010) Synthetic Control Methods for Comparati
Location
Room 208
Start Date
4-10-2019 1:30 PM
End Date
4-10-2019 2:45 PM
Hydraulic Fracturing and Agricultural Productivity: Evidence from California
Room 208
In this study, we investigate the effect of hydraulic fracturing on agricultural productivity in the state of California, which is the United States' leading agricultural as well as unconventional oil/gas mining state. According to multiple news reports (e.g., CBS and the New York Times), the Central Valley farmers have started to notice a decline in their agricultural production since 2009 (roughly corresponding to the Shale Boom period), which the local farmers have vehemently attributed to the pollution of irrigation water as a result of the nearby fracking activities. In particular, the farmers' water tests allegedly showed that their irrigation water contained the very same chemical compounds found in the wastewater produced by oil wells. To understand whether the (under-regulated) discharge of wastewater from fracking activities generates any measurable negative externalities for agricultural production, we examine yield per acre of major crops in counties with and without fracking activities, treating 2009 and onwards as the treatment (alleged water contamination) period. Our identification strategy relies on computing the plausible counterfactual for each fracking county by constructing synthetic controls (Abadie, Diamond, and Hainmueller, 2010). This methodology allows to compare the post-treatment crop yield trajectory of a treated county with the trajectory of a weighted combination of similar but untreated counties. Our results from the synthetic control as well as difference-in-differences analyses consistently show that there is no statistically significant effect of fracking activities on county-level crop yield. We do not claim that hydraulic fracturing has not had effects on individual farms that comprise a county economy. The analysis presented here suggests that such effects of fracking wash out over a relatively small geographic area Reference: Alberto Abadie, Alexis Diamond, and Jens Hainmueller (2010) Synthetic Control Methods for Comparati