2/7/13 What Does the Research Indicate

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Whentryingtobetterunderstandthepotentialimpactofaproposedfracsandminemayhaveonthe
localcommunity,itishelpfultoexaminetheworksofotherswhohavestudiedtheissue. Somewhat
surprisingly,therehasbeenanotabledeclineinthenumberofstudiesexaminingU.S.mining.Most
recentstudiesfocusonlargescaleinternationaloperationswhichprovideverylittlecomparativeinsights
forthesmallerfracsandminingoperationsinWisconsin.Moststudiesthatcancontributetoour
understanding oftheeffectsofminingonincome,jobmigration,transportation,andlandownership
arelargelyqualitativewiththeexceptionoftheeffectsofminingonpropertyvalues.Inotherwords,
otherthanasmallhandfulofstudieslookingatthe
impactofminesonpropertyvalues,moststudies
aredetailedcase-studiesofindividualmining
communities. Whatfollowsisasummationof
generalfindingspervasiveintheminingliterature
thatpertaintotheeffectsofminingonfourkey
localelements:housingprices,transportation,
income,andjobmigration.
Recentliteraturesuggeststhatminingseemsto
haveanegativeeffectonthevalueofproperty
withinacloseproximitytothemine.Thefarther
thepropertyisfromthemine,thelesslikelylocalminingactivitieswouldbedetrimentaltohousing
prices. Whilethisconclusionseemslessthansurprising,theresearchersadvisecautioninbroadly
applyingtheseconclusions:uniquecommunitycharacteristicsisimportantindiscerningaccurate
predictions.
AlthoughfracsandmininginWisconsinisarelativelynewphenomenontherearetwoparticularstudies
thatarehelpfulaswetrytounderstandthepotentialeffectsofminingonWisconsincommunities.Ina
statisticalanalysisoftheimpactofsurfacecoalminingonhousingvaluesWilliams(2011)foundthatthe
greaterprevalenceofminescontributedtosignificantdecreasesincountypropertyvalues.Williams
estimatedthateachadditionalsurfaceminedecreaseshousingvaluesinthecountybybetween.34%and
1.7%.Whilelackingexactfigures,thisstudyalsofindsaclearnegativerelationshipbetweenthe
proximityofhomestoamineandtheirassociatedvalues. Similarfindingsareproposedinanotherstudy
concerningagravelmineoperationinRichlandTownship,Michigan.Erickcek(2006)purportsthata
What does the res earch s ugges t?

2/7/13 What Does the Research Indicate

www.scribd.com/doc/119658297/What-Does-the-Research-Indicate 2/9
concerningagravelmineoperationinRichlandTownship,Michigan.Erickcek(2006)purportsthata
proposedgravelminewillreducepropertyvaluesby$31.5millioninaggregate.Thisestimate
encompassesover1,400homes,makingup60%of totalresidentialproperties.
Transportationofmaterialsisaveryinfluentialfactorwhenattemptingtodiscerntheeffectsofmining
onlocalcommunities. InErickceks(2006)studyofgravelmineoperationsinMichigan,Erickcelnotes
thattherearemanyassociatedactivitiesasidefromthehiringofhaulingdrivers.Astudythatfocuseson
theeffectsofaproposedhaulroutetoaquarryonnearbyresidencesconcludesthatpropertyownersare
willingtopaymoretobefartherfromtheroute.Specifically,propertyownerswillingnesstopaytobe
fartherfromtherouteincreasesat4.94%perkilometerorroughly7.92%permile. Inessencepeople
arelesswillingtoliveneareitherthemineitselforhaulroutesandthisisreflectedinlowerproperty
valuesincloseproximitytoeither.
Miningwagestypicallyarehighrelativetoothersectorsinthelocaleconomy.Thegeneralconsensusin
theavailableresearchliteratureisthatminingleadstoanincreasedlevelofaverageincome.Anumber

WhoWeAre:
Withanofficeineach
Wisconsincounty,Cooperative
Extensiondevelopspractical
educationalprogramstailored
tolocalneedsandbasedon
universityknowledgeand
research.Wedeliverour
expertisetothepublic,
addressingawiderangeof
needstopeople,plantsand
animals,inbothurbanand
ruralareasofthestates.
WhatWeDo:
Weteach,learn,leadandserve,
ofstudiesfindthatsmalleramountsofjobsarebeingcreatedbynewminingoperations
duetotheincreasinglymechanisticnatureoftheindustry.Recentminingendeavorsare
associatedwithcapitalintensiveactivity,thus,creatingrelativelyhigherwagesforfewer
workers.Also,duetothevolatilityoftheminingindustryanditsintrinsicassociationwith
commodityprices,onetendstofindalowerconcentrationofotheractivitiesinmining
dependentcounties.Aspecializedruraleconomyinmining,therefore,tendstobemore
unstablerelativetoaneconomywithdiversifiedeconomicactivities.
Numerousstudies,suchastheworkbyFreidenburgandWilson(2002),indicatethat
miningactivityisquitevolatileandheavilycorrelatedwiththeboom-bustcycleof
commodityprices.Labormigrationisassociatedwiththisvolatilecycleinherenttomining
activity;highratesofpopulationincreases mirrortheincreaseddemandforenergyand
minerals.InastudydoneanalyzingthemigrationpatternsofruralAppalachia,aregion
notedforitscoalindustry,Cushing(1999)findsthatintimesofincreaseddemandforcoal
thein-migrantstotheregionarenotconduciveforfutureeconomicgrowth.Themajority
ofthesein-migrantscouldbecharacterizedasolderand/orlesseducatedindividuals.
Thus,whenminingoperationssloworclosetheseworkersarelesscompetitiveforother
employmentopportunitiesandcanbecomeahindrancetofutureeconomicgrowth.
TheavailableresearchonU.S.miningimpactsonlocalcommunitiespointstothree
generalconclusions:
Landpricestendtobedepressedclosetotheminesandhaulroutes.
Jobstendtobefewerbuthigherpayingandthelowskilljobstendto betakenbylow
skilledlesseducatedin-migrants.
Miningdependentlocaleconomiestendtobemoreunstableandassuchlesslikelyto
experiencespin-offdevelopment.
WorksCited
Bender,LloydD.,AndOthers.1985. TheDiverseSocialandEconomicStructureof NonmetropolitanAmerica.Rural
DevelopmentResearchReportNo.49.
Williams,A.M.2011.TheImpactofSurfaceCoalMiningonResidentialPropertyValues:AHedonicPrice
Analysis. DepartmentofEconomics,UniversityofTennessee.
Erickcek,G.2006.AnassessmentoftheeconomicimpactoftheproposedStonecoGravelMineoperationon
RichlandTownship. ReportcompletedforRichlandTownshipPlanningCommission,August 15:2006.
Freudenburg,WilliamR,andWilson,LisaJ. 2002.MiningtheData:AnalyzingtheEconomicImplicationsof
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Info and Rating
Category: Uncategorized.
Weteach,learn,leadandserve,
connectingpeoplewiththe
UniversityofWisconsin,and
engagingwiththemin
transforminglivesand
http://www.uwex.edu/about/cooperative.html
Freudenburg,WilliamR,andWilson,LisaJ. 2002.MiningtheData:AnalyzingtheEconomicImplicationsof
MiningforNonmetropolitanRegions. SociologicalInquiry72(4):549-575.
Neelawala,P.,C.Wilson,andT.Robinson.2010.Whatimpactdoesanannouncementofaproposedquarry
roadhaveonpropertyvalues?EvidencefromQueenslandAustralia.
Cushing,B.1999.MigrationandpersistentpovertyinruralAmerica:AcasestudyfromCentralAppalachia.
PanditKandWithersDetal.,Migrationandrestructuring intheUSRowmanandLittlefield:Longman.
Whenconsideringthedevelopmentofasandminethereareseveralissuesthatthe
communityshouldconsider. Theserangefromthepotentialeconomicbenefitsasso-
ciatedwithemploymentopportunitiestothecompatibilityofopenpitmineswith
tourismandenvironmentalconcerns. Whenconsideringtheseissuesitisimportant
thatlocalelecteddecision-makersandconcernedcitizenshaveaccesstothebestin-
formationavailable. Thisseriesoffactsheetsisaimedatprovidingsomeinsightsinto
arangeofissuessurroundingthedevelopmentoffracsandmines.
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