A Spatial-Temporal Analysis of Income Inequality and Wind Energy Development in the U.S

Wind energy has become the most prevalent renewable energy source in the U.S., with significant advantages in decarbonization, economic growth, and access to affordable clean energy. However, there are concerns over the distributional impacts of wind energy development. This study aims to empirically assess (i) whether wind energy projects have an impact on income inequality and to discuss (ii) if there are significant trends in the impact of wind energy from a spatial-temporal perspective. To this end, we have generated a new variable measuring wind energy development at the county level in the U.S. at four points in time. Considering the potential endogeneity of income inequality, we also employed geophysical data for wind capacity as instrumental variables. Combining the data collected from the American Community Survey (ACS), we find a strong positive impact between wind energy development and income inequality after controlling for a wide array of socioeconomic variables. Yet, the magnitude of the effect seems to decrease over time as wind energy projects expand. In light of these findings, we discuss potential mechanisms for the effect of wind energy development on income inequality and their policy implications