Fracturing and foreclosure: A study of shale gas development and foreclosure levels in Pennsylvania

Despite the considerable attention hydraulic fracturing of shale has generated around the world, few academic studies to date have examined the potential impacts shale development has had on local housing markets. This study aims to partially fill this void by examining the temporal relationship between shale development and foreclosure levels in Pennsylvania zip codes. The empirical models measure how foreclosure levels change in relation to the number of unconventional gas well permits, drill starts, and well completions for all Pennsylvania zip codes from January 2007 to June 2012. Zip code and quarterly fixed effects are included. The results suggest that past shale development was associated with an increase in foreclosure levels in comparison to neighboring and socioeconomically similar zip codes without shale development. The estimates are larger and more consistent after 2009 and in comparison to neighboring zip codes.