Private Contracts as Regulation: A Study of Private Lease Negotiations Using the Texas Natural Gas Industry

This study explores factors driving tract-level heterogeneity in the quality of leases executed by property owners who transfer their mineral rights to firms that drill for and extract natural gas. The data set consists of tract-level aggregates of lease terms, our measures of lease quality, and tract-level census data from the leases. We find that higher-quality leases are negatively correlated with higher concentration of minority households when controlling for census-tract-level characteristics. Based on the findings, we propose policies to reduce observed heterogeneity in the quality of leases and, subsequently, to reduce residents’ exposure to negative effects of nearby well sites.

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Journal Article
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Agricultural and Resource Economics Review, Volume 44, Number 2
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 Record created 2017-04-01, last modified 2018-01-23

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