The Effect of the Fracking Boom on Non-Durable Consumer Expenditure : Evidence From Consumer Scanner Data

I use consumer scanner data to study the response of non-durable consumer expenditure to a localized economic shock induced by the fracking boom in the U.S. The identification strategy utilizes the spatial variation in the location of geological resources and the variation in the timing of the fracking boom across the U.S. Using difference-in-differences and event study approaches, I find on average 4.4% quarterly increase in the household expenditure on non-durable goods in areas affected by fracking. I find no difference in the effects on nominal expenditure and real consumption. I also examine changes in composition of consumer baskets, and heterogeneous effects by age, income, and education