Environmental justice and Coasian bargaining: The role of race, ethnicity, and income in lease negotiations for shale gas

Journal Article (Journal Article)

Using a unique combination of datasets and estimation techniques, we test whether private lease negotiations to extract oil and natural gas exhibit features of Coasian efficiency. We demonstrate that measures of wealth (including income, house square footage, and land acreage), typically determinants of willingness to pay for environmental quality, do affect bargaining outcomes. However, race, ethnicity, and language also play important roles after conditioning upon these variables, suggesting an environmental injustice and a breakdown of efficient Coasian bargaining. We further demonstrate that failure to negotiate protections in leases leads to increased risk of future drilling violations, and that weak lease restrictions are not generally offset by strong local ordinance restrictions.

Full Text

Duke Authors

Cited Authors

  • Timmins, C; Vissing, A

Published Date

  • July 1, 2022

Published In

Volume / Issue

  • 114 /

Electronic International Standard Serial Number (EISSN)

  • 1096-0449

International Standard Serial Number (ISSN)

  • 0095-0696

Digital Object Identifier (DOI)

  • 10.1016/j.jeem.2022.102657

Citation Source

  • Scopus