The writing process involved in volume phase holographic storage in LiNbO3 has been extensively studied, but no quantitative work exists concerning the decay of holograms. Since direct electrical conductivity measurements are difficult, if not impossible, decay rate measurements can provide an accurate figure for the material's conductivity. A coupled-wave theory developed by Kogelnik is presented describing diffraction by a phase grating with unslated fringes in a lossy medium. Next, a dynamic theory of hologram grating developed by Kim is presented. Using classical E-M theory, the hologram decay is predicted to be a sum of exponentials. Experimental data on writing and decay processes is presented which agree well with Kim's theoretical predictions, but which differ markedly from the expected decay behaviour. An excellent fit to the experimental decay curves was obtained by assuming a time dependent conductivity of the form a(t) = CJQ + e. The data show that T, the time constant involved, varies with the iron doping level in the crystal. A model is proposed to explain the phenomenon, involving metastable trapping centers releasing electrons into the conduction band.