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

Author

Listed:
  • O. Ashton Morgan
  • John C. Whitehead
  • William L. Huth
  • Gregory S. Martin
  • Richard Sjolander

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

Suggested Citation

  • O. Ashton Morgan & John C. Whitehead & William L. Huth & Gregory S. Martin & Richard Sjolander, 2013. "Measuring the Impact of the BP Deepwater Horizon Oil Spill on Consumer Behavior: Evidence from a Natural Experiment," Working Papers 13-11, Department of Economics, Appalachian State University.
  • Handle: RePEc:apl:wpaper:13-11
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    File URL: http://econ.appstate.edu/RePEc/pdf/wp1311.pdf
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    References listed on IDEAS

    as
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    5. O. Morgan & John Whitehead & William Huth & Greg Martin & Richard Sjolander, 2013. "A Split-Sample Revealed and Stated Preference Demand Model to Examine Homogenous Subgroup Consumer Behavior Responses to Information and Food Safety Technology Treatments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(4), pages 593-611, April.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. New Appstate working paper
      by John Whitehead in Environmental Economics on 2013-05-01 16:29:20

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    More about this item

    Keywords

    consumer behavior; bp oil spill; revealed and stated preference; latent class analysis;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery

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