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The Local Economic Impact of Wind Power Deployment

Diskussionspapiere extern

Nils May, Oivind A. Nilsen

Bonn: IZA, 2015, 78 S.
(Discussion Paper Series / Forschungsinstitut zur Zukunft der Arbeit ; 9025)


Globally installed wind power capacity has grown tremendously since 2000. This study focuses on the local economic impacts of wind power deployment. A theoretical model shows that wind power deployment is not necessarily driven by locally-accruing economic payoffs, but also by other factors such as emphasis on environmentally-friendly energy production and its associated benefits. The theoretical analysis is followed by an empirical analysis using German county-level panel data. After controlling for a set of observable and unobservable factors, the results state that wind power installation has no impact on GDP per capita. These findings support the predictions from the theoretical model: local economic impacts cannot alone explain the observed increase in wind power capacity.

JEL-Classification: Q42;R11;C23
Keywords: wind power, economic development, panel data
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