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Estimating the value of lost recreation days from the Deepwater Horizon oil spill

Author

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  • English, Eric
  • von Haefen, Roger H.
  • Herriges, Joseph
  • Leggett, Christopher
  • Lupi, Frank
  • McConnell, Kenneth
  • Welsh, Michael
  • Domanski, Adam
  • Meade, Norman

Abstract

The 2010 Deepwater Horizon oil spill in the Gulf of Mexico was the largest ever in U.S. waters, eclipsing the 1989 Exxon Valdez spill in terms of the sheer quantity of oil released and the scale and scope of activities impacted. We developed a recreation demand model to monetize economic damages associated with lost shoreline recreational user days attributable to the spill. The unprecedented magnitude of the spill disruption led to a variety of innovations. We estimate a model of shoreline recreation trips to the Gulf Coast region from the general population of the contiguous U.S., combining single and multiple-day trips, calculating travel costs that incorporate detailed information on flying costs and transportation mode choice, and using alternative-specific constants to control for site characteristics. Losses per recreational user day are assessed using utility adjustments that reproduce the decline in recreation observed through onsite counts. Sensitivity analyses demonstrate our lost user day value is robust to changes in income imputation, nesting structure, site aggregation and spill calibration, and show the importance of accounting for flying as a mode choice. Estimated losses from the primary shoreline study are $520 million (±166) out of the total recreational damages of $661 million (2015$).

Suggested Citation

  • English, Eric & von Haefen, Roger H. & Herriges, Joseph & Leggett, Christopher & Lupi, Frank & McConnell, Kenneth & Welsh, Michael & Domanski, Adam & Meade, Norman, 2018. "Estimating the value of lost recreation days from the Deepwater Horizon oil spill," Journal of Environmental Economics and Management, Elsevier, vol. 91(C), pages 26-45.
  • Handle: RePEc:eee:jeeman:v:91:y:2018:i:c:p:26-45
    DOI: 10.1016/j.jeem.2018.06.010
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    2. Amy W. Ando, 2022. "Equity and Cost-Effectiveness in Valuation and Action Planning to Preserve Biodiversity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(4), pages 999-1015, December.
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    5. Casola, William R. & Peterson, M. Nils & Pacifici, Krishna & Sills, Erin O. & Moorman, Christopher E., 2023. "Conservation motivations and willingness to pay for wildlife management areas among recreational user groups," Land Use Policy, Elsevier, vol. 132(C).
    6. Beland, Louis-Philippe & Oloomi, Sara, 2019. "Environmental disaster, pollution and infant health: Evidence from the Deepwater Horizon oil spill," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    7. V Kerry Smith & W. Douglass Shaw & Michael P. Welsh & Chris Dixon & Lisa Donald, 2022. "A New Strategy for Benefits Transfer," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(1), pages 155-178, January.
    8. Ando, Amy W. & Cadavid, Catalina Londoño & Netusil, Noelwah R. & Parthum, Bryan, 2020. "Willingness-to-volunteer and stability of preferences between cities: Estimating the benefits of stormwater management," Journal of Environmental Economics and Management, Elsevier, vol. 99(C).
    9. Kolstoe, Sonja & Naald, Brian Vander & Cohan, Alison, 2022. "A tale of two samples: Understanding WTP differences in the age of social media," Ecosystem Services, Elsevier, vol. 55(C).
    10. Gellman, Jacob & Walls, Margaret A. & Wibbenmeyer, Matthew, 2023. "Welfare Losses from Wildfire Smoke: Evidence from Daily Outdoor Recreation Data," RFF Working Paper Series 23-31, Resources for the Future.
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    12. Steven J. Dundas & Roger H. von Haefen, 2021. "The importance of data structure and nonlinearities in estimating climate impacts on outdoor recreation," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 107(3), pages 2053-2075, July.
    13. Xie, Lusi & Adamowicz, Wiktor & Lloyd-Smith, Patrick, 2023. "Spatial and temporal responses to incentives: An application to wildlife disease management," Journal of Environmental Economics and Management, Elsevier, vol. 117(C).
    14. Alexandra L. Egan & B. Louise Chilvers & Sue Cassells, 2024. "Expected direct costs of an oil spill in a UNESCO World Heritage area in New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 68(3), pages 608-627, July.

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    More about this item

    Keywords

    Recreation demand; Discrete choice model; Natural resource damage assessment;
    All these keywords.

    JEL classification:

    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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