Risk and behavioral regional investment : a case study of speculation in the 19th century oil industry of Pennsylvania

Studies have been conducted on the speculation in the nineteenth-century oil industry of Pennsylvania as well as the factors affecting nineteenth-century regional investors. The study of the landscape of risk has lead to changes in perceptions depending on local knowledge, personal experiences of areas and availability of professional scientific opinion. It has been shown that different categories of risk could assume markedly varying proportions in different geographical areas, such as in the case of the proportion of dry holes to productive strikes. Over a period of time, nevertheless investment capital gravitated progressively to locations perceived as yielding higher returns at lower risk, though not without riding several spatially distinct waves of speculation in the process. Details of the investigation is however needed before any statements can be made about the extent of departure from a normative efficient allocation of capital resources between competing regions in the nineteenth century.