Measuring the Impact of the BP Deepwater Horizon Oil Spill on Consumer Behavior: Evidence from a Natural Experiment

Ash Morgan (), John Whitehead, William L. Huth, Gregory S. Martin and Richard Sjolander

No 13-11, Working Papers from Department of Economics, Appalachian State University

Abstract: A natural experiment setting is exploited to develop a unique dataset of oyster consumer actual and anticipated behavior immediately prior to and following the BP Deepwater Horizon oil spill. Using data from a repeat sample of oyster consumers, a pre and post-spill revealed and stated preference model allows both a short and longer-term response to the spill to be investigated. Findings indicate that, as expected, the BP spill had a negative impact on oyster demand in terms of short-run actual behavior, although spill effects show signs of dissipating several months following the spill. However, by accounting for unobserved heterogeneity in the sample, findings further indicate that short and longer-term spill responses differ across consumer groups. For the larger consumer groups, the negative spill effects continue over the longer-term horizon, while other groups are either non-responsive or increase consumption following news of the spill. Key Words: Consumer behavior, BP oil spill, revealed and stated preference, latent class analysis

JEL-codes: Q10 Q22 Q51 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cwa and nep-ene
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Persistent link: https://EconPapers.repec.org/RePEc:apl:wpaper:13-11

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