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Mining and alcohol consumption: New evidence from northern Canada

TitleMining and alcohol consumption: New evidence from northern Canada
Year of Publication2017
AuthorsGodfrey, T. L.
UniversityUniversity of Alberta
CityEdmonton, AB
Keywordsalcohol, canada, matching, mining, north

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.

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