Thursday, July 16, 2015

New Research on Australia's mining boom

David A. Fleming and Thomas G. Measham [] from CSIRO in Canberra, Australia have a collection of published papers documenting the effects of the mining boom in Australia.

In Australian Journal of Agricultural and Resource Economics [], with Dusan Paredes,
Understanding the resource curse (or blessing) across national and regional scales: Theory, empirical challenges and an application
The relationship between resource extraction activity and economic growth has been widely studied in the literature, and the resource curse hypotheses emerged as a theory to explain the effects of resource windfalls on national economies. However, within countries, resource booms and busts can have distinctive effects across local economies, as extractive regions face particular economic consequences unlikely to be observed in nonresource regions. Empirically, most studies analysing the resource curse have relied on cross-country models to estimate effects and inform policy; however, the use of regional – within-country – analysis has gained attention from scholars lately, promoted by two advantages: it avoids unobserved country heterogeneities confounding economic outcomes caused by resources and exploits the subnational quasi-natural experimental conditions generated by endowments. This paper contributes to the resource curse literature by discussing its theoretical causes across scale (regional vs. national effects) and highlighting the empirical challenges involved in the analysis of mining economic impacts across regions. We complement the discussions by econometrically modelling economic growth across nonmetropolitan substate regions of Australia during a period of resource windfalls, finding that in most cases, resources have been a blessing for local economies, although negative effects have also been experienced in parts of the country.

In Resources Policy []
Local job multipliers of mining
The mining industry is capital intensive, and generally, direct labour employed is low compared to other industries. Considering this, when analysing local economic effects of mining it is important to observe local job multipliers that the industry generates in other sectors of the economy. In this study we use data from the recent Australian mining boom to estimate local job multipliers from mining, using econometric models and avoiding the rigidities and strong assumptions that input–output based models rely on. With census data and samples of Australian sub-state regions, our estimations show that local multipliers of mining are important for some local services sectors such as transport and rental and accommodation services, while local job spillovers into tradable goods sectors (manufacturing and agriculture) are statistically not significant. We also show how the magnitude of local multipliers varies nationwide from those of regions where operating mines are located.

In Australian Journal of Agricultural and Resource Economics []
Local economic impacts of an unconventional energy boom: the coal seam gas industry in Australia
Complementing the scarce economic literature about local impacts of energy extraction booms, this paper empirically investigates economic outcomes related to the new coal seam gas (CSG) industry located across southern Queensland. This Australian state has seen an unprecedented inflow of investments into the extraction of this previously unexploited unconventional natural gas over the last decade. We analyse census data to study income and employment effects associated with the CSG boom, exploiting the quasi-experimental conditions provided by CSG extraction areas (treatment regions) and regions without this development (control regions). Findings show that treatment regions have higher income growth than control areas during 2001–2011 for families residing locally and for individuals present on census night. Employment in the mining sector also shows higher growth as has non-mining employment in some areas. We include comparisons between CSG areas with no major mining history (the Surat basin) and CSG areas where mining was important before the CSG boom (the Bowen basin), to better understand boom effects in areas with different initial mining industry importance in their economies. Local job multipliers are also analysed for Surat basin CSG areas, where positive impacts (job spillovers) are restricted to construction and professional services jobs, while agricultural jobs have decreased.

In Australian Geographer [],
Income inequality across Australian regions during the mining boom: 2001-11
As mining expands throughout the world, a growing body of literature is focusing on the relationship between mining and well-being in locations where resource extraction occurs. Although many topics such as employment and migration have been researched, the impacts of mining on income inequality have received less attention from scholars. Income inequality is a highly debated topic and the Gini coefficient (GC) one of the most popular indicators used to measure and discuss it. In this paper we estimate GCs for all sub-State regions of Australia and analyse their changes during the ‘mining boom decade’ (2001–11) across mining and non-mining regions. Our results show that, on average, income inequality increased by around 4.8 per cent in mining regions, compared to 8.7 per cent in the average non-mining region. However, the results also show important variation in changes of GC across mining regions, suggesting that the industry is likely to affect the distribution of local incomes in different ways. The method we propose to estimate GCs for regional areas and the results obtained across mining and non-mining regions provide important insights for future research and for regional policy makers, especially those concerned with the socio-economic impacts of industries such as mining across regions.

1 comment:

  1. Thanks Wessel for sharing our research amongst your networks. As it happens we have just published a new paper in Global Environmental Change:


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