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Journal of the Association of Environmental and Resource Economists· 2026Q1

The Local Economic and Welfare Consequences of Demand Shocks for Coal Country

Daniel Kraynak

Short summary

Demand-driven declines in US coal production between 2007-2017 ($8.03 billion drop) led to an estimated $1 billion decline in the economic welfare of coal country residents.

AI-generated from the title and abstract; the full text is not read.

Key points

  • Demand shocks caused an $8.03 billion decline in thermal coal production value from 2007-2017.
  • Coal producing regions experienced job and wage losses in mining and related industries.
  • In-migration, home values, and public education spending decreased.
  • Poverty rates increased in affected regions.
  • Aggregate economic welfare for coal country residents declined by approximately $1 billion.

AI-generated from the title and abstract; the full text is not read.

Abstract

This paper applies the outputs of a stylized dispatch model of the US electricity sector to estimate the local welfare effects of demand-driven declines in coal production. I find that coal producing regions shed jobs and wages primarily in coal mining and adjacent industries, with effects occurring both in Eastern and Western producing regions. In-migration, home values, and expenditures on public education also decline, and poverty increases. Applied in a spatial equilibrium framework under varying assumptions, my estimates imply an aggregate decline on the order of $1 billion in the economic welfare of coal country residents due to a net decline of $8.03 billion in thermal coal production value from 2007-2017.

The authors' abstract, as published at the source. Journal of the Association of Environmental and Resource Economists, 2026 · DOI ↗

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Field: Economics and Econometrics

Economics and EconometricsEconomics, Econometrics and Finance