Temporal Stability of Norwegians' Willingness to Pay to Avoid an Oil Spill in Lofoten
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This paper investigates the temporal stability of Norwegians’ willingness to pay (WTP) to avoid an oil spill in Lofoten. Two questions are addressed: 1) does Norwegians’ WTP to avoid an oil spill in Lofoten change over time? And 2) which factors can explain changes/stability over time? To address these questions a Contingent Valuation study has been conducted. The initial survey was conducted in 2013, and a second round of the same survey was conducted in 2020. The latter was completed under unusual circumstances, when the Covid-19 pandemic hit Norway. A statistical analysis of the data has been carried out to assess the temporal stability of WTP. The results show a statistically significant reduction in WTP from 2013 to 2020. A significant reduction in household income between 2013 and 2020 might explain the decrease in WTP. There is reason to believe that the Covid-19 pandemic has negatively influenced WTP. Comparing properties of the two samples and different questions from the surveys indicate stability in determinants of WTP across years. Our results suggest that WTP is not stable, but preferences are. Even though components were added to control for the pandemic, our findings may not be applicable to normal economic conditions.
Master's thesis in Economics