The coastal zone is a dynamic and recalcitrant ecological system. Problems stemming from coastal erosion, storms, and sea level rise are exacerbated by development along the coast and, especially, by development at the water's edge. Options for management of shoreline erosion on barrier islands include shoreline hardening, beach replenishment, and coastal retreat. We analyze survey data from North Carolina households in order to evaluate the economic welfare effects of beach erosion management alternatives on the general population. The survey gathers data on use (and non-use) of coastal beaches, perceptions of coastal resource quality, knowledge of coastal processes, and stated preference referendum votes for programs to manage coastal erosion. We build on the microeconomic models of Eom and Larson (JEEM 2006) and Huang et al. (AJAE 2016) to jointly estimate parameters of recreation demand and passive use values. Our models do not impose weak complementarity (typically invoked in welfare analysis of recreation demand), but rather they can test for its existence. By combining revealed preference and contingent valuation, we employ a consistent behavioral model that permits analysis of co-existing use and passive use values and how these values are affected by beach width, erosion management strategy, and the presence of environmental impacts engendered through management.

We find mean (median) WTP for beach erosion management of $7.91 ($10.70) per household, per year. Willingness-to-pay is much smaller (close to zero) for beaches maintained in conjuction with shoreline armoring, but considerably larger (two to three times greater) for beaches maintained by shoreline retreat (each relative to beach replenishment). Substantial portions of WTP (one-half to two-thirds) reflect passive use values that would be ignored if one were to assume weak complementarity. Counter-intuitively, WTP is increasing in the presence of negative environmental impacts, and this effect does not vary with management approach. We believe this may represent a perception that greater funding may alleviate negative environmental effects, but this only conjectrue at this point. Incremental values for beach width indicate mean WTP of $0.24 per meter and median WTP of $0.47 per meter. These results could be instrumental in analysis of shoreline management & adaptation, wherein marginal changes to beach width can occur via natural forces or management decisions.

Professor Landry received his PhD from the University of Maryland, College Park in 2004. He spent 10 years in Economics and the Institute for Coastal Science and Policy at East Carolina University before moving to the University of Georgia. His expertise is in environmental and natural resource economics, with a focus on coastal resource management, risk & insurance, non-market valuation, and experimental economics. He was recently funded by the National Science Foundation, Coupled Human-Natural Systems (with colleagues at other institutions) to study coastal adaptation to climate change.

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