Energy, Inequality, Jobs

“Resource curse,” poverty and Appalachia; lessons in research, data and politics

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Last updated: April 22, 2013

(iStock)
(iStock)

The Appalachian Mountain region, which includes West Virginia and parts of 12 other states from New York to Mississippi, is known for its distinctive cultural, musical and religious traditions. It also has an abundance of coal resources and elevated poverty rates. According to the Appalachia Regional Commission (ARC), between 2007 and 2011, over 16% of the residents of nine Appalachian states lived at or below the federal poverty line, compared to just over 14% of all U.S. residents during the same time period.

While the poverty gap between the overall region and the rest of the nation has narrowed since 1990, rates in central Appalachia have remained disproportionately high. Some scholars have examined whether or not a “rural effect” could make remote areas more prone to poverty. Another possibility is that Appalachia suffers from a “resource curse,” something most often associated with developing nations. The theory suggests that abundant energy resources can bring both employment and income, but can also have significant negative effects, including weak local government, lower education levels, impacts on human health and environmental degradation. And when local economies are dominated by large mineral-extraction industries, the result can also be reduced economic growth overall.

Academic research in this area comes against the backdrop of a contentious fight over the costs and benefits of coal mining for the region; this fight has only grown more embattled as the practice of mountain top mining has expanded.

Three scholars at Ohio State University, Mark D. Partridge, Michael R. Betz and Linda Lobao, have conducted research in this area. In a study published in January 2013 in the American Journal of Agricultural Economics, “Natural Resource Curse and Poverty in Appalachian America,” they examined the relationship between coal mining and poverty rates in the Appalachian region (ARC counties). The researchers compared Appalachian region poverty rates to those of non-Appalachia United States during the 1990 to 2010 period, and examined employment rates, natural resource extraction practices and household demographics.

Beyond its findings, this paper is an interesting case study in how research can carry political implications. As the authors note, the research was partially funded by the Appalachian Research Initiative for Environmental Science at the Virginia Center for Coal and Energy Research. As reporter Ken Ward Jr. of the Charleston Gazette points out in an April 2013 investigative piece, ARIES has significant financial backing from the coal industry. (Also see this related interview with Ward.) In addition, while the American Journal of Agricultural Economics is peer reviewed, the paper was submitted as part of a professional conference and the “articles in these sessions are not subjected to the journal’s standard refereeing process,” the journal states.

The findings of the January 2013 paper, which are then subsequently revised (see at bottom of post), include:

  • Appalachian coal mining is associated with higher poverty. The association was not found with other types of mining, nor did it apply to the rest of the United States.
  • Proximity to a metropolitan area tends to reduce poverty rates; the researchers suggest that the closer the area to a population center, the more economic opportunities become available to residents.
  • “Poverty in the ARC region is less persistent in the 2000s than the 1990s, which may indicate a weakening of historical disadvantages that kept Appalachian poverty high.”
  • The researchers found that the relation between coal mining and poverty declined after 2000, and that mountain-top mining (MTM) was associated with lower poverty during this period. However, they cautioned that the trend, if correct, may not be permanent, and continued their research in a subsequent paper that came to different conclusions (summarized below).
  • Education level has a significant negative impact on poverty rate. “In 2000, high school graduation seemed to be the threshold that most directly pushed workers above poverty.”

Not long after, the authors of the January 2013 paper, joined by Lawrence A. Brown and Michael Farren of Ohio State University, took another look at the relationship between coal mining and poverty in Appalachia. The updated research, “The Mining Industry and Community Poverty Across Appalachia,” was part of Environmental Considerations in Energy Production, a publication of the Society for Mining, Metallurgy and Exploration (SME).

The findings of the updated study include:

  • “For ARC counties, the share of coal mining employment in 1990 is related to higher poverty in 2000 but net change in coal employment over the 1990-2000 decade has no statistically significant relationship.”
  • Over the next decade, “the share of coal employment in 2000 had no statistically significant relationship with subsequent (2010) poverty rates.”
  • “Coal employment tends to be related to better local conditions relative to employment in oil/gas, as the latter sector is correlated with higher poverty in 2010.”
  • “Within the ARC counties, [mountain top mining] had no statistical relationship to poverty,” a reversal of the earlier finding.

Overall, the authors state, “the results suggest that coal’s historically observed natural resource curse or positive relationship with poverty may be changing in the post-2000 period.” As they cautioned in the January 2013 research, however, certain geographic areas may continue to be receptive to coal mining operations, resulting in a clustering of negative effects.

Tags: poverty, rural, coal


Writer: | April 22, 2013

Citation: Partridge, Mark; Belz, Michael; Lobao, Linda. "Natural Resource Curse and Poverty in Appalachian America." American Journal of Agricultural Economics, 2013, Vol. 95, No. 2, 449-456. doi: 10.1093/ajae/aas086.  
 
Lobao, Linda; Partridge, Mark; Brown, Lawrence A.; Belz, Michael; Farren, Michael. "The Mining Industry and Community Poverty Across Appalachia." Environmental Considerations in Energy Production, Society for Mining, Metallurgy and Exploration, 2013.

Analysis assignments

Read the issue-related blog post "Coal's ARIES Project: Who Gets a Seat at the Table?" published at The Charleston Gazette's "Coal Tattoo" blog.

  1. What insights into the world of research, and how it is produced, does this piece reveal?
  2. What key questions should reporters ask about the origins of research, and how should they negotiate gray areas?

Read the full study titled “Natural Resource Curse and Poverty in Appalachian America.” Then read the follow-up study "The Mining Industry and Community Poverty Across Appalachia."

  1. What are the key findings that have been revised over the course of the two studies? Why?
  2. How should reporters follow-up when new findings contradict old ones?

 

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