The effect of shale energy activity on house values
Abstract
The combination of hydraulic fracturing and horizontal drilling has fundamentally raised the volume of oil and gas that can be extracted domestically in the US. Increased shale oil and gas production benefits U.S. consumers and helps boost local and regional economies. On the other hand, the costs attributed to shale activity appear to be much more localized, prompting the question of whether shale activity benefits the local communities that bear its externalities. Previous conclusions on the net impacts of shale activity on local house values have been mixed. This study analyzes the effect of shale production on typical house prices across counties in the continental U.S. from 2010 to 2019. Our findings suggest that shale activity does not significantly impact typical house prices. We deduce that at a county level, the pros and cons of shale activity related to residential real estate values appear to offset each other.