Willingness-to-pay for coastline protection in New South Wales: Beach preservation management and decision making

Abstract

Coastal erosion is a global and pervasive phenomenon that predicates a need for a strategic approach to the future management of coastal assets (both built and natural): should we invest in protective structures such as seawalls that aim to preserve specific coastal features, or allow natural coastline retreat to preserve sandy beaches and other coastal ecosystems? Determining the most suitable management approach in a specific context requires a better understanding of the full suite of economic values the population holds for coastal assets, including non-market values. In this study, we characterise New South Wales residents' willingness to pay to maintain sandy beaches (width and length) in the face of coastal erosion along the Australian state's nearly 2200 km coastline. The measurement instrument is a stated preference referendum task administered state-wide to a sample of 2014 respondents, with the payment mechanism defined as a purpose-specific incremental levy of a fixed amount over a set period of years. We use an innovative application of a Latent Class Binary Logit model to deal with “Yea-sayers” and “Nay-sayers”, as well as revealing the latent heterogeneity among sample members. We find that 65% of the population would be willing to pay some amount of levy, dependent on the policy setting. In most cases, there is no effect of degree of beach deterioration – characterised as loss of width and/or length of sandy beaches of between 5% and 100% - on respondents' willingness to pay for a management levy. This suggests that respondents who agreed to pay a management levy were motivated to preserve sandy beaches in their current state irrespective of the severity of sand loss likely to occur as a result of coastal erosion. Willingness to pay also varies according to beach type (amongst Iconic, Main, Bay and Surf beaches) – a finding that can assist with spatial prioritisation of coastal management. Not recognizing the presence of nay-sayers in the data or recognizing them but eliminating them from the estimation will result in biased WTP results and, consequently, biased policy propositions by coastal managers.