Economic Values of Coastal Erosion Management: Joint Estimation of Use and Passive Use Values With Recreation Demand and Contingent Valuation Data

Abstract

Revealed and stated preference survey data from North Carolina households are utilized to estimate a joint structural microeconometric model of recreation demand and willingness-to-pay (WTP) for coastal erosion management among beach visitors and non-visitors. We test for and reject weak complementarity, implying existence of non-use values associated with management of North Carolina’s coastal resources. We find stronger preferences for shoreline retreat (median WTP = $22.20 per household, per year) as a management strategy relative to beach nourishment (WTP = $7.45) and substantially weaker preferences for shoreline armoring (WTP = $0.09). Shoreline retreat exhibits much larger estimates of non-use values, whereas non-use values for shoreline armoring are negative. Minimizing negative environmental impacts of erosion management increases WTP over 200%. Our data permit estimates of marginal value of incremental beach width accruing to beach users and non-users (which ranges from $0.23 and $0.47 per meter).