America’s shale energy boom came with a lot of winners.
According to a new study, the increase in shale oil production coincided with a jump in support for Republican candidates in areas throughout the country where the boom occurred.
Viktar Fedaseyeu of Bocconi University, Philip Strahan of Boston College, and Erik Gilje of the University of Pennsylvania looked at candidates elected in shale oil areas from 1996 onwards.
“Consistent with past research, we find that this positive wealth shock led voters to increase their support for conservative, Republican candidates,” wrote the researchers. “We show that almost all of the adjustments to these exogenous changes in taste occur at the extensive margin, as Democrats lose seats to Republicans. The effects are so large that by 2012, 80% of House seats were held by Republicans, up from a little more than 50% before the booms.”
Additionally, the researchers found that in areas in the same state but just outside the scope of the oil boom, these effects did not occur. Support for Republicans stayed roughly the same, around 50%, between 1996 and 2012.
The researchers found that the reasons for the change was simple, but interesting, voter preferences skewed conservative as the wealth from the shale oil came in as a function of their new wealth.
“Landowners in shale-boom areas receive big inflows of wealth, tantamount to thousands of local residents ‘winning the lottery,’ which earlier studies have shown leads voters to increase support for conservative, low-tax policies,” said the study. “That shale booms result in more conservative political attitudes of the electorate is consistent with Brunner, Ross, and Washington, who find that positive economic shocks in general reduce support for redistributive policies.”
This, combined with more conservative attitudes on energy policy, shifted the electorate conservatively.
In response, Democratic candidates, instead of adjusting course to reflect these trends, stuck to their ideological positions losing voter support at the margins.
“We have shown that election outcomes change dramatically following shale booms toward Republican (and conservative) candidates, leading to large election losses among Democrats,” wrote the researchers. “Within individual, however, we find little effect of shale booms on voting records. These results together suggest that most politicians hold fast to their ideology and as a result many lose power.”
Beyond just candidates, the research showed that liberal interest groups also lost support and money while conservative groups made gains.
Based on the study, the researchers concluded the changes from the shale oil boom were not just physical and economic, but political as well.
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