Estimating the Ex-ante Recreational Loss of an Oil Spill using Revealed and Stated Preference Data

ABSTRACT

This paper combines data to estimate the ex-ante recreational impact of oil spills. Using a unique contingent behavior question, our application highlights the gains in combining stated and revealed preferences. We consider both a reduction of the available choice set and of perceived site quality. We show that omitting perceived site quality leads to low welfare losses while omitting alternative specific constants leads to high welfare losses. Overall, we find recreational losses due to potential oil spills in Norway ranging from 347 and 524 NOK (32 to 49 US dollars) per person across the four oil spill scenarios.