Addressing Oil Spills and Agricultural Productivity. Evidence of Pollution in Nigeria

Beatriz Manotas-Hidalgo ()
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Beatriz Manotas-Hidalgo: Universidad Publica de Navarra, https://www.unavarra.es/departamento-economia

No 2109, Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra from Departamento de Economía - Universidad Pública de Navarra

Abstract: This paper examines how the pollution generated by oil operations in Nigeria can affect agricultural total factor productivity. I analyze oil spills, which are the main ecological disaster in Nigeria and lead to major environmental, economic, and social problems. Following a consumer-producer household framework, and applying a difference-and-difference approach, I estimate an agricultural production function. I find that farmers located less than 10 kilometers from oil spills suffer a relative reduction in agricultural output of around 2.73%. I also examine alternative mechanisms and find that oil-spill pollution can explain my results. I detect less owner-occupied land and a drop in labor income in urban areas close to oil spills, which could also be explained by a decrease in the labor productivity component. This study highlights an externality through which the oil industry affects living conditions in rural areas and stresses the importance of clean-up in areas close to oil spills.

Pages: 9 pages
Date: 2021
New Economics Papers: this item is included in nep-afr, nep-agr, nep-dev, nep-eff, nep-ene and nep-env
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