Texas and Louisiana are both oil-producing states. A decrease in the price of oil will reduce output in these two states, hurting owners of capital and workers in the oil industry. While some capital will be able to migrate to other sectors (for example, those that use oil as a factor of production), a significant fraction of capital is specific to the oil industry. By that same token, some workers in the oil industry have skills that transfer to other sectors, and this transportation will take time and not costless