The immediate impact of oil spills can usually always be found in the news. From Exxon Valdez to BP, oil spills have accounted for some of the worst man-made environmental disasters in recent history, with extensive media coverage covering their immediate wake. But what happens in the long-term? Specifically, what is the economic impact of such a disaster on the cities most affected by it? For students working toward finance or other business degrees online, it’s important to understand the ripple effects of major events on financial health.
According to research by University of Alabama at Birmingham Collat School of Business Professor Bruce Gordon, the long-term effects of such disasters can be far reaching and costly.
Researchers at UAB examined the impact of the BP oil spill on April 20, 2010, when high-pressure methane gas escaped into the Deepwater Horizon rig, eventually igniting and exploding. Over 84 days, it is estimated that over 200 million gallons of crude oil was spilled. The researchers for this study specifically assessed the impact on Alabama and Louisiana’s coastal economy, through the lens of the sales volume and sales prices of condominiums in the area.
Researchers found evidence of decreased sales volume and condominium prices along the affected coasts from July through December 2010. This shows the long-term and large scale financial impacts that events like this can have – that reach far beyond the environmental impact.
See more details about this study in the below infographic by UAB Collat School of Business: