Advertising and Environmental Stewardship: Evidence from the BP Oil Spill
Eric Chyn and
No 19838, NBER Working Papers from National Bureau of Economic Research, Inc
This paper explores whether private markets can incentivize environmental stewardship. We examine the consumer response to the 2010 BP oil spill and test how BP's investment in the 2000-2008 “Beyond Petroleum” green advertising campaign affected this response. We find evidence consistent with consumer punishment: BP station margins and volumes declined by 2.9 cents per gallon and 4.2 percent, respectively, in the month after the spill. However, pre-spill advertising significantly dampened the price response, and may have reduced brand switching by BP stations. These results indicate that firms may have incentives to engage in green advertising without investments in environmental stewardship.
JEL-codes: H0 H23 L0 M3 M38 Q5 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env and nep-mkt
Note: EEE IO PE
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Published as Lint Barrage & Eric Chyn & Justine Hastings, 2020. "Advertising and Environmental Stewardship: Evidence from the BP Oil Spill," American Economic Journal: Economic Policy, vol 12(1), pages 33-61.
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