Hypothetical Bias

Economic Values of Walton County Beaches: A Benefit Transfer Analysis

Another one from the Southwick Associates winter newsletter:

In 2005, Hurricane Dennis passed through Walton County, Florida. Following this hurricane, 250 permits to coastal property owners were issued to allow installation of temporary emergency structures to protect their property from shoreline erosion. This resulted in the installation of several miles of new seawalls along the county’s Gulf coast beaches. Because of these installations, the resulting structures were a possible risk to threatened and endangered species.

In 2008, Southwick Associates produced a report that identified the relative economic values held for Walton County beaches by the public. The report was done along with Ecological Associates, Inc. of Jensen Beach, on behalf of Walton County, the Florida Fish and Wildlife Conservation Commission, the U.S. Fish and Wildlife Service and others. The results are being used to help assess the amounts to be paid by beach owners and the community when seawalls and other erosion control measures are implemented. The funds will be used for beach habitat mitigation and conservation efforts in ecologically sensitive areas.

A method known as "benefits transfer" was used. This approach adapts economic values produced for other beach locations to help gain a better idea of the possible values held for Walton County beaches specifically related to current and future use for tourism & recreation.

Walton County officials reported an estimated 2.9 million beach visitors annually. Assuming 2.4 visitors per household, 1.2 million households visit the beaches each year. An estimate of the number of days spent at the beach is 4.5 per trip. Applying the willingness-to-pay per household per day values from the benefit transfer analysis to the number of days visited yields the aggregate recreation value of $2.6 million without sewalls and $1.9 million with seawalls. Therefore, the public prefers open beaches versus beaches with seawalls. The difference between the two aggregate values can be considered the annual value of avoiding such structures on Walton County beaches. Therefore, an estimate of the annual value of avoiding erosion control structures on beaches is $134.56 per foot of beach.

To read the full report, including beach valuation studies and results, a downloadable version is available at www.southwickassociates.com/freereports/default.aspx.

Another Great Depression?

From the Morganton News Herald (The Worst of Times), Mark Strazizich forecasts the probability:

"I don't think we're ever going to see another Depression," Strazicich said.

Whither Mankiw's online teaching resources?

Has any instructor other than me found that the Mankiw website is impossible to navigate? This makes the promised instructional resources impossible to find and integrate into one's course.

I'm discouraged.

ECO 2040: Exporting inflation

Asian Inflation Begins to Sting U.S. Shoppers:

The free ride for American consumers is ending. For two generations, Americans have imported goods produced ever more cheaply from a succession of low-wage countries — first Japan and Korea, then China, and now increasingly places like Vietnam and India.

But mounting inflation in the developing world, especially Asia, is threatening that arrangement, and not just in China, where rising energy and labor costs have already made exports to the United States more expensive, but in the lower-cost alternatives to China, too.