The Winds of Change: How Wind Energy Impacts Local Economies in Iowa

Abstract

As renewable energy has become less costly over time, chiefly since the mid-2000s, the wind energy industry has been expanding rapidly. This is especially true in Iowa, which has become a leading producer of wind energy in the United States. Most wind farms are built in rural communities, and many people rely on them for employment and income, but studies examining the effects on an economy-wide scale have been mixed. This paper seeks to determine how much the wind energy industry affects economies on a county-level scale in Iowa. Panel data was collected including the number of wind turbines in a county and annual retail sales from 1995 to 2019. Regressions were run with and without using wind speed as an instrument for the number of turbines. The results indicate that the presence of wind turbines in a county has a small, but positive, impact on the amount of retail sales in the county. This would suggest that wind energy not only benefits the environment but also the community.