Lost Recreational Value from the Deepwater Horizon Oil Spill Using Revealed and Stated Preference Data
John Whitehead (),
Tim Haab (),
Sergio Alvarez and
No 16-16, Working Papers from Department of Economics, Appalachian State University
The lost recreational use values from the BP/Deepwater Horizon oil spill in the Gulf of Mexico were estimated from cancelled recreational trips to Northwest Florida. The impacts were calculated using the travel cost method for a single site with primary data collected from an online survey conducted after the spill. The data were collected in August and September 2011 with respondents residing in U.S. states that constitute the primary market for coastal tourism to Northwest Florida. The survey gathered information from respondents on their recreational visits to Northwest Florida, including detailed information on their past trips and the number of trips cancelled to the study region due to the oil spill. The empirical analysis involves the estimation of random parameters negative binomial count data demand functions. Using these models we find significant preference heterogeneity surrounding the effects of the oil spill. Aggregate damages are estimated to be $207 million. Key Words: BP/Deepwater Horizon oil spill,travel cost method,cancelled trips
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