Scandinavian Working Papers in Economics

Discussion Paper Series in Economics,
Norwegian School of Economics, Department of Economics

No 9/2015: The Local Economic Impact of Wind Power Deployment.

Nils G. May () and Øivind Anti Nilsen ()
Additional contact information
Nils G. May: DIW Berlin - German Institute for Economic Research, Postal: Mohrenstrasse 58, 10117 Berlin, Germany
Øivind Anti Nilsen: Dept. of Economics, Norwegian School of Economics and Business Administration, Postal: NHH , Department of Economics, Helleveien 30, N-5045 Bergen, Norway

Abstract: 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.

Keywords: Wind Power; Economic Development; Panel Data.

JEL-codes: C23; Q42; R11

34 pages, April 24, 2015

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