University of Wisconsin–Madison

Event Detail

Asset Ownership, Windfalls, and Income: Evidence from Oil and Gas Royalties

Presented by:
Jeremy Weber
Graduate School of Public and International Affairs
University of Pittsburgh

Friday, April 6, 2018
Taylor-Hibbard Seminar Room (Rm103)
12:00 pm-1:15 pm

From 2010 to 2014, royalty payments to owners of oil and gas rights totaled $175 billion and reached almost every county in the U.S. We study the effects of royalties and and find that each unanticipated royalty dollar received by county residents created an additional $0.48 in local income, implying a multiplier similar to that of government spending. The full effect of royalties shifted local income distributions upward, decreasing low-income tax returns and increasing high-income returns. In aggregate, the total income effect was $66 billion in 2014, or 0.5 percent of U.S. personal income. Over the 2000 to 2014 period, royalties accounted for 70 percent of the local income effect of oil and gas development.

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