Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
Consumer debt is an important vehicle for smoothing through income shocks. I study localized income shocks from oil and gas development to investigate consumer response. Using quarterly information on consumer debt and oil and gas activity between 2000 and 2016, I find that consumer debt increased at a peak of $660 per capita, equivalent to 1.3% of median household income in counties with shale endowment and increased drilling. Shocks to local wages via drilling revealed a marginal propensity to borrow of 0.45. Relative to areas with oil and gas development experience, the marginal propensity to borrow was two times larger in previously undeveloped areas.