Political instability and non-market valuation: Evidence from Croatia

We examine the effect of political instability on willingness to pay estimates (WTP) from nonmarket valuation, using data from a choice experiment implemented in Zagreb, Croatia to value groundwater quality and quantity. To evaluate the sensitivity of preferences for environmental quality to instability, we use the timing of a period of public protest that occurred in the city during the data collection and compare preferences before and during the protest. We find some evidence that WTP is lower in the period of political instability, but the result is sensitive to the specification used.