The long-run vanity of Prudhoe Bay

Abstract

Upon the completion of the Trans-Alaska Pipeline System in 1977, Alaskan oil production surged, peaking in 1988. From 1988 onward, Alaskan oil production steadily declined. The temporal characteristics of the Alaskan oil boom make for an ideal case study of the economic effects of resource booms more generally. The boom generated significant short-run economic gains that were quickly diluted by inward migration. In the long run though, the income gains may have turned into losses. These results are robust to using a variety of comparison units, including a synthetic control.