Preferences for Mitigation of the Negative Impacts of the Oil and Gas Industry in the Niger Delta Region of Nigeria

Abstract

We examine Nigerian preferences for the mitigation of negative impacts associated with oil and gas production using a discrete choice experiment. We analyse the data using a Bayesian ‘infinite mixtures’ model, which given its flexibility can approximate an array of existing model specifications including the mixed logit and finite mixture specifications. The application of this model to our data suggest multimodality in the marginal willingness to pay distributions associated with mitigation policy characteristics. Individuals are willing to pay for mitigation of negative impacts, but are not necessarily willing to trade-off very large increases in unemployment or poverty to achieve these benefits.