Beach Nourishment and Protection (1995) / Chapter Skim
Currently Skimming:
E Economic Concepts and Issues: Social Costs and Benefits of Beach Nourishment Projects
E Economic Concepts and Issues: Social Costs and Benefits of Beach Nourishment Projects
Pages 251-266
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 251... ...
The social costs are, strictly speaking, the benefits foregone-that is, a measure of the benefits that could have been produced for society by using these resources in a different way. Both of these questions are of considerable pragmatic importance for beach nourishment projects.
|
From page 252... ...
Many of the economic questions that arise with respect to beach nourishment projects and their alternatives require for their resolution an assessment of their social costs and benefits (Haveman, 19691. The evaluation must include the present value of all costs and benefits during the effective life of the project, whether or not privately appropriated through markets, in order for the evaluation to be a true representation of the social costs and benefits associated with the project.
|
From page 253... ...
was the first official publication to apply the language of conventional welfare economics to the analysis of federal projects and policies. By today's standards, the Green Book was technically simplistic, but it did encompass systematic, theoretically based definitions of costs and benefits; it made the important distinction between true "social benefits" and "economic impacts"; and it discussed the discount rate problem and the treatment of risk.
|
From page 254... ...
The federal valuation documents that emphasize nonmarket as well as market valuation are diverse and include EPA's Guidelines for Regulatory Impact Analysis, the U.S. Forest Service's Resource Planning Assessments, and the Electric Consumers Protection Act, as well as the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (also referred to as "CERCLA" and "Superfund")
|
From page 255... ...
The travel cost method is applied chiefly to recreation and thus is particularly applicable to measuring the recreational benefits of beach nourishment projects for those individuals who travel some discernible distance to use the beach. This approach depends on applying conventional welfare economics methods to demand functions that are estimated by using the cost of accessing the recreational site as the "price" of the recreational trip.
|
From page 256... ...
As such, hedonic valuation is particularly well suited to valuing the net amenity and storm protection benefits of beach nourishment projects associated with local property, although appropriate data are often difficult to obtain before construction of a project. Curtis and Shows (1984)
|
From page 257... ...
Cost categories include: · opportunity costs, · negative downstream or ecological effects, · negative effects on local amenities and quality of life, · increased infrastructure burdens, and · development-induced increases in risk. Benefits Categories Changes in Value Related to Changes in Storm Damage Reduction The value of existing residential and commercial property may change in response to storm damage reduction and erosion control.
|
From page 258... ...
. To avoid double counting, the calculation of recreational values needs to include only those benefits associated with individuals that come from a distance at which property values are not affected by the beach amenity value.
|
From page 259... ...
These costs must include the present value of all renourishment activities required over the relevant time horizon. As renourishment needs are dictated by uncertain storm events, probability distributions on the events will be a necessary input into the valuation.
|
From page 260... ...
Some of the above concepts can be measured directly from observable market data, others by calculating producer and consumer surpluses from estimated supply and demand functions, and still others by using nonmarket methods of valuation. In principle, the USAGE's National Economic Development Procedures Manualfor Coastal Storm Damage and Erosion (USAGE, 1991)
|
From page 261... ...
The emphasis has been on calculating expected damages to private property and public infrastructure and the engineering costs of repair and replacement. Land values or capitalized net income measures are prescribed for erosion control benefit measurement.
|
From page 262... ...
Beach nourishment projects, by providing access to new or different amenities, by changing the probability distribution for storm and erosion damage, and by potentially altering the liability for any damage, will cause behavioral responses that change demographics, recreational activity, infrastructure, property inventories, and so forth. To properly forecast the effects, over time, of a project, these behavioral adjustments due to the project must be taken into account: A simple illustration can be found in the recreational benefits category.
|
From page 263... ...
Private investment responses to projects will depend on what individuals believe the future risks to be and on the institutional structure for handling those risks. A beach nourishment project designed to provide some erosion or storm damage reduction over an average life of 10 years, for example, may be construed by individuals as a signal that the public sector intends to provide protection for the indefinite future.
|
From page 264... ...
In the absence of controls, the behavioral response associated with perceived damage reduction of this sort is especially serious since it may raise the level of social liability. Beach nourishment projects may reduce the expected physical impacts of storms and erosion, but by stimulating private investment (and the accompanying public infrastructure)
|
From page 265... ...
1987a. Measuring, the Benefits of Water Quality Improvements Using Recreational Demand Models.
|
From page 266... ...
1991. National Economic Development Procedures Manual for Coastal Storm Damage and Erosion.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.