Political instability and non-market valuation: Evidence from Croatia

• Non-market valuation can be sensitive to political conditions.
• We use data from a choice experiment to value groundwater quality and quantity.
• Political instability emerges during the data collection.
• WTP before the instability is higher, but results are sensitive to the specification.

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.