How Shale Boom Fuels Republican Congressional Clout by [email protected]
Wharton’s Eric Gilje discusses his research on the impact of the fracking boom on voter preferences.
What happens to voter preferences in an area that sees a sudden influx of wealth? According to the research paper, “Voter Preferences and Political Change: Evidence from the Political Economy of Shale Booms,” voters whose fortunes swelled as a result of the shale boom switched to the Republican party from the Democratic party en masse — and they elected politicians who reflected their newfound beliefs, according to Wharton finance professor Erik Gilje, who co-authored the paper along with Viktar Fedaseyeu, a professor at Bocconi University in Italy and Philip E. Strahan, a professor at Boston College.
The boom in shale oil, which uses a controversial new technology called ‘fracking,’ has minted sudden oil and gas millionaires. Gilje said this wealth effect led voters to support the party that backs energy development, which has implications for congressional races in these states. The paper studied voter data in seven states from 1996 to 2012.
The research showed that before the shale boom, less than half of the House seats were held by Republicans in the areas studied. After the boom, the GOP held more than 80% of the seats. Voter shifts affected political races from the county and district level all the way to presidential elections. Moreover, their changing mindsets also spilled over into other arenas, such as civil rights, labor and tax policies, among others.
[email protected] recently spoke to Gilje about his research. An edited transcript of the conversation appears below.
[email protected]: We’re here with Wharton finance professor Erik Gilje to talk about one of his research papers, which actually found a link between voter preferences and the shale boom. So tell us about your paper.
Gilje: Basically, what we are trying to do is trace out how political change occurs in the U.S. electoral system. There are two sets of hypotheses. One is that when voter preferences shift, your elected officials change their positions to adapt to the new preferences. The other is when voter preferences shift, they throw out their old elected representatives and bring in somebody new. So we kind of test each of these two hypotheses within the context of shale discoveries.
Shale discoveries are an interesting place to look at this because when these discoveries occur, there’s a large change in voter preferences toward becoming more conservative and supportive of issues that will help underpin the development of shale. What we see overall is that there’s a shift in voting for more conservative political candidates — Republican candidates — and that linked with this?Twitter , rather than existing Democratic candidates changing their views, … they lose their jobs and Republican candidates replace them.
“What we see overall is that there’s a shift in voting for more conservative political candidates — Republican candidates.”
So, in terms of which of these two hypotheses seem to dominate, it’s the case that you basically find a new representative that fits your preferences as opposed to your elected representative adapting their preference towards your views — which is kind of interesting because we typically think of politicians as saying whatever they need to say to get elected. This evidence would suggest otherwise.
[email protected]: So you actually gathered data from seven states — I understand those are red states.
Gilje: Some of them are red, some of them are, I guess, purple. You have Pennsylvania, West Virginia, North Dakota, Arkansas, Oklahoma, Louisiana, Texas and many of these states actually were maybe not always considered red states, certainly prior to shale discoveries.
[email protected]: What are some key takeaways from your paper?
Gilje: The key takeaways are these, that in essence you see that the mechanism through which the political change occurs is through bringing in new representatives and that we find several other effects in that when you bring in a new representative, you get a lot of other things with that, not just people that help protect shale but also people that may vote differently on social issues or other issues that are unrelated to shale.
And then lastly, we kind of have a final result in the paper where we show that even the Democrats that adjusted their voting records slightly to become more conservative still lost their jobs, suggesting that maybe they couldn’t credibly convey that they had adapted to the new preferences of their congressional districts.
[email protected]: I think what really grabbed me about your paper was your major finding that when there’s a big, positive economic shock to an area that more Democrats become Republicans. Can you tell me why?
Gilje: This is one interesting aspect of the analysis where we’re actually able to obtain access to exit poll data and so some people might say “Well, this result was driven by the changes in the electoral makeup, people moving into the area”, but in fact, through this exit poll data, people are asked about their prior political preferences and we actually show that people that self-identify as historically being more liberal, shift to be more conservative when these shale discoveries occur.
It’s maybe not surprising when you think about the positions that each of these political parties have tended to have on energy development and shale. Also, you have in these areas large increases in income, large increases in job growth and that basically, people in these areas adapt their preferences to try to protect and insure that this development continues. And historically, the Republican Party has been more consistent with doing that with energy development.
“Since the beginning of the shale boom, 17 Democratic seats have shifted to Republicans … that’s half of the current Republican majority in Congress.”
[email protected]: Do you think you can handicap the race for us this election year?
Gilje: What the results suggest is not necessarily about one presidential candidate versus another because the results are really at the congressional district level, but they suggest that the magnitude of the shift that has occurred that’s linked to shale discoveries are quite large. In our paper, we say that in the aggregate, since the beginning of the shale boom, 17 Democratic seats have shifted to Republicans and in terms of economic magnitudes, that’s half of the current Republican majority in congress.
So to me, what it suggests is that if the Democratic party does not adapt its views or seek out these energy voters in a way that they haven’t been [sought out] before — gaining control of the U.S. House of Representatives will be challenging for them because a large [number] of the Republican [seats] exists due to their preference and support of shale development and so until that part of the Democratic platform maybe changes or adapts to that aspect of the electoral calculus, I think it will be challenging on at least the House side for Democrats to make significant headway.
[email protected]: Did that come as a surprise to you?
Gilje: The magnitude certainly came as a surprise. I think we expected to see some shift towards Republicans but when you actually trace out the effect on house seats, compare that to the current majority in Congress, what you end up seeing is that this was quite important for