This paper investigates the effects of changes in crude oil prices and offshore oil and gas production on the economic performance of U.S. Coastal Gulf States—Texas, Louisiana, Alabama and Mississippi. The empirical results do not provide statistical evidence to reject the hypothesis that positive shocks to oil and gas prices and production variation increase the economic performance of these coastal Gulf States. However, the magnitude of the response to changes in prices varies across the states. In addition, the empirical results show significant differences in the duration of the lingering economic effects of price shocks and changes in production among the states. The duration varies depending upon whether the state is a net petroleum exporter or net importer, and whether the state has a diversified economic base or structure.
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