2017 – Thesis Completed Mining and Alcohol Consumption: New Evidence from Northern Canada
Abstract Mines operate throughout the world to keep up with the growing demand for mineral resources. While economic development depends on the minerals mines extract, there can be environmental, economic, and social effects to areas and communities nearby. This thesis focuses on the impact of mining on alcohol consumption. Existing literature provides qualitative findings regarding social changes that may occur during a mining boom, possibly correlated with an increase in alcohol use by individuals who live in communities nearby. However, to the best of our knowledge, the literature fails to offer quantitative evidence of such impacts obtained through rigorous statistical methods. In order to determine a measurable effect of mining on alcohol consumption in communities nearby, this study collects data from various sources to build a unique dataset of individuals in northern Canada. Our dataset includes Global Positioning System (GPS) coordinates of respondents and operating mines, which allows us to estimate the number of additional alcoholic drinks individuals consume due to living near a mine. Northern Canada is an important area of focus due to the many small and isolated resource reliant communities, the large share of Aboriginal peoples in the total population, and the concentration of mines. Our estimation technique relies on propensity score matching. This is important because the respondent’s location of residence (i.e. proximity to a mine) may be endogenously determined. Our rich dataset allows us to match respondents that live close to a mine with respondents that live far. The matching is based on a large number of important socioeconomic covariates such as income, employment, consumption, education, age, gender, marital status, ethnicity, lifestyle, and seasonality. Results are consistent with the established qualitative literature. We estimate that individuals who live within 10 km of a mine consume, on average, an additional 2 alcoholic drinks a week. This effect decreases as mines get farther away. Additionally, we use unconditional quantile regressions to find that the effect of mines is larger for individuals to the right of the mean of the distribution of alcohol consumption. We compare our estimates with those from other studies that examine various factors that influence alcohol consumption. This exercise puts our estimates in perspective and shows that the effect of proximity to mines is larger than, for example, proximity to casinos or bars. The thesis provides empirical evidence that supports past qualitative studies, which may aid the implementation of more effective policies that can improve wellbeing in these small rural communities near mines and facilitate more sustainable development.
I grew up in Penticton, British Columbia, and received a bachelor’s in Economics from Brigham Young University – Idaho in 2014. A year later I started a master’s program with the University of Alberta’s Department of Resource Economics and Environmental Sociology studying Resource Economics. I am at the end of my second year, working on completing my thesis.
For my thesis project, funded by ReSDA, Dr. Bruno Wichmann, Dr. Brenda Parlee, and I are working with the Inuvialuit Regional Corporation (IRC) to better understand issues related to sustainability and wellbeing in the North. I had the opportunity to work in the Inuvialuit Settlement Region with the IRC on this project during the summer of 2016.
The first component of this project is the creation of a welfare model to monitor socio-economic indicators for the IRC. This model will use a system of interrelated equations to analyze how a change in one indicator will affect another. This will help the IRC more effectively work towards sustainability in their communities.
The second component of this project uses quantitative methods with a large data file from multiple Government of Canada sources to analyze the effects of mines on the number of alcoholic drinks individuals consume. We find a positive relationship between mines and alcohol consumption; individuals closest to mines consume the most additional alcoholic drinks and the effect decreases as individuals get farther from mines. We add to the literature on the effects of mining by providing quantitative evidence on how mines affect alcohol consumption in Northern Canada.
Associated ReSDA project:
Department of Resource Economics and Environmental Sociology
University of Alberta