Measuring the Impact of the BP Deepwater Horizon Oil Spill on Consumer Behavior

Abstract

We exploit the timing of the BP Deepwater Horizon oil spill to develop a unique dataset of oyster consumer actual and anticipated behavior immediately prior to and following the event. A revealed and stated preference model allows both short- and longer-term responses to the spill to be investigated. Findings indicate that 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. By accounting for unobserved heterogeneity in the sample, findings further indicate that short- and longer-term spill responses differ across consumer groups. (JEL Q22, Q51)