Speaker
Marco Sanfilippo (Università degli Studi di Torino)
Abstract:
This paper quantifies the effect of oil spills on local economic development in Nigeria. We assemble a geo-referenced panel of more than 13,000 oil spills and merge them with satellite indicators of economic activity, poverty, vegetation condition, and migration. We develop a hydrological model that traces downstream contaminant transport, allowing spill exposure to extend beyond the point of discharge. To address endogeneity, we instrument hydrologically defined exposure with the interaction of global oil-price shocks and historical transport costs. Relative to comparable cells, spill-exposed cells exhibit a 7.2-unit decline in night-time lights, an 8.9 percentage-point rise in unlit settlements, and 29 additional residents per 1,000 without electricity. Potential mechanisms include environmental degradation, with a 0.08 km² annual acceleration in deforestation and a 0.43-point decline in NDVI, and a net out-migration of 76 people per 1,000 (per cell-year). Dynamic event-study estimates show that these effects intensify from four to twelve years post-spill.