Measuring Fiscal Effects Based on Changes in Deepwater Off-Shore Drilling Activities

This paper accomplishes two objectives. First, this paper estimates a model for oil wells drilled in the Gulf of Mexico using specific time series models. In the second objective, the number of wells drilled are applied to the COMPAS model for Louisiana. Wells drilled are treated as final demand in an input-output model framework to estimate exogenous changes in employment demand. This demand is then applied to a block recursive labor force module that measures changes in key labor market variables. These variables then serve as exogenous variables in revenue capacity equations. These revenue capacity variables are finally applied to local government expenditure demand equations. Per capita demand changes for key local government variables are then estimated.