Code for: "Relinquishing Riches: Auctions vs Informal Negotiations in Texas Oil and Gas Leasing"

Principal Investigator(s):  View help for Principal Investigator(s) Thomas R. Covert, University of Chicago. Booth School of Business; Richard L Sweeney, Boston College

Version:  View help for Version V1

Name File Type Size Last Modified
  code 01/11/2023 05:47:PM
  output 01/11/2023 05:46:PM
  writeups 01/11/2023 05:49:PM
.gitignore text/plain 342 bytes 01/11/2023 12:46:PM
README.md text/x-web-markdown 28.9 KB 01/11/2023 12:46:PM
README.pdf application/pdf 262.7 KB 01/11/2023 12:50:PM
makefile text/plain 17.4 KB 01/11/2023 12:46:PM

Project Citation: 

Covert, Thomas R. , and Sweeney, Richard L. Code for: “Relinquishing Riches: Auctions vs Informal Negotiations in Texas Oil and Gas Leasing.” Nashville, TN: American Economic Association [publisher], 2023. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2023-02-17. https://doi.org/10.3886/E181143V1

Project Description

Summary:  View help for Summary
This paper compares outcomes from informally negotiated oil and gas leases to those awarded via centralized auction. We focus on Texas, where legislative decisions in the early twentieth century assigned thousands of proximate parcels to different mineral allocation mechanisms. We show that during the fracking boom, which began unexpectedly decades later, auctioned leases generated at least 55 percent larger up- front payments and 40 percent more output than negotiated leases did. These results suggest large potential gains from employing centralized, formal mechanisms in markets that traditionally allocate in an unstructured fashion, including the broader $3 trillion market for privately owned minerals.

These materials provide the code to estimate the results in the paper.  The data for this project is published separately, as a Harvard Dataverse replication dataset: https://dataverse.harvard.edu/dataset.xhtml?persistentId=doi:10.7910/DVN/9WJ3JK.  The makefile contained within these materials will automatically download the replication data, if the replicator has not already acquired them.

Scope of Project

Subject Terms:  View help for Subject Terms Auctions; decentralized markets; oil and gas exploration
JEL Classification:  View help for JEL Classification
      D44 Auctions
      L13 Oligopoly and Other Imperfect Markets
      Q35 Hydrocarbon Resources
Geographic Coverage:  View help for Geographic Coverage Texas
Time Period(s):  View help for Time Period(s) 1/1/2004 – 12/31/2016
Collection Date(s):  View help for Collection Date(s) 2/1/2017 – 9/2/2021
Universe:  View help for Universe Mineral leases in land originally belonging to the Texas Permanent School Fund.
Data Type(s):  View help for Data Type(s) administrative records data; geographic information system (GIS) data; program source code


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Published Versions

V1 [2023-02-17]

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