Addressing oil spills and agricultural productivity. Evidence of pollution in Nigeria

• Autores: Beatriz Manotas Hidalgo
• Localización: Documentos de Trabajo ( Universidad Pública de Navarra. Departamento de Economía ), Nº. 9, 2021
• Idioma: inglés
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• Resumen

  • This paper examines how the pollution generated by oil operations in Nigeria can affect agricultural total factor productivity. I analyze oil spills, which are the main ecological disaster in Nigeria and lead to major environmental, economic, and social problems. Following a consumer-producer household framework, and applying a difference-and-difference approach, I estimate an agricultural production function. I find that farmers located less than 10 kilometers from oil spills suffer a relative reduction in agricultural output of around 2.73%. I also examine alternative mechanisms and find that oil-spill pollution can explain my results. I detect less owner-occupied land and a drop in labor income in urban areas close to oil spills, which could also be explained by a decrease in the labor productivity component. This study highlights an externality through which the oil industry affects living conditions in rural areas and stresses the importance of clean-up in areas close to oil spills.