Panel Paper: The Effect of Community Reinvestment Funds on Local Acceptance of Unconventional Gas Development

Saturday, November 8, 2014 : 10:15 AM
Enchantment Ballroom C (Hyatt)

*Names in bold indicate Presenter

Naveed Paydar1, Olga Schenk2, Ashley Bowers2, Sanya Carley3, John Rupp2 and John Graham2, (1)School of Public and Environmental Affairs, Indiana University, (2)Indiana University, (3)Indiana University - Bloomington
Public policy scholars have increasingly been interested in explaining how public support for an emerging technology changes over time. Insights from the innovation and risk perception literature emphasize that public support varies relative to its perceived costs and benefits. Analogous to cost-benefit analysis, which can be used to evaluate tradeoffs that enhance social welfare in the economic realm, the inverse relationship between perceived costs and benefits can be leveraged to enhance public support in the political realm. That is, by increasing the perception of a technology’s benefits it may be possible to reduce the perception of its risks and thereby enhance its public support. Unconventional gas development (UGD) projects have faced extreme public opposition in a variety of communities. Some regulatory bodies have responded to public concerns by reinvesting a proportion of the revenue earned for general use by the state or – in some jurisdictions – by communities where UGD is occurring (e.g., through severance taxes or “impact fees”). There are a number of such reinvestment efforts underway in the US, yet the role of community reinvestment on public support is not well understood in terms of public reaction to development and implementation of policies across state and local jurisdictions.

In this study, we examine the promise of “community reinvestment schemes” in the US against the results of a survey of individual’s attitudes toward UGD. We assess the extent to which increasing the perception of benefits through reinvestment dollars can improve public acceptance of UGD. Part of this survey is an experiment that is designed to measure the variation in attitudes toward a new local UGD project depending on 1) the creation of a community reinvestment fund fed by gas developers’ revenues that elected officials will use to invest in community-level projects (first treatment group), 2) allocation of the revenues at the state level for reinvestment by state government officials (second treatment group), and 3) no reinvestment fund to return revenue to the state or local community (control group). The survey (N = 2,400) is conducted in six states that represent a continuum of acceptance of UGD, ranging from prohibition to active support (New York, Illinois, California, Pennsylvania, Ohio, and Texas). The sampling plan includes an oversampling of residents who live in counties where UGD is known to have occurred in recent years. Thus, the survey design allows us to test whether respondents who live near a development site react differently to a reinvestment scheme proposal compared to respondents who do not. Additionally, multivariate analyses with a wide range of knowledge, media exposure, and demographic measures will be used to assess whether community reinvestment may be more or less able to increase public support for UGD among different subgroups of the population.

Full Paper: