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Coastal armoring and sinking property values: the case of seawalls in California

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  • Brucal, Arlan
  • Lynham, John

Abstract

Rising sea levels necessitate careful consideration of different forms of coastal protection but cost-benefit analysis is limited when important non-market social costs have not been measured. Seawalls protect individual properties but can potentially impose negative externalities on neighboring properties via accelerated beach loss. We conduct a hedonic valuation of seawalls in two coastal California counties: San Diego and Santa Cruz. We find no strong evidence to suggest that the presence of a seawall is positively correlated with the value of the home protected. However, we find that seawalls are strongly negatively correlated with the value of neighboring properties in Santa Cruz but not in San Diego county, suggesting that the effect of seawalls depend on certain geographical attributes. Our results are robust to accounting for the public-good nature of locational attributes and the potential spatial dependence of housing prices. Simulation reveals that doubling the extent of seawalls in San Diego and Santa Cruz could reduce property tax revenues by $7 million and $54 million, respectively.

Suggested Citation

  • Brucal, Arlan & Lynham, John, 2021. "Coastal armoring and sinking property values: the case of seawalls in California," LSE Research Online Documents on Economics 104324, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:104324
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    File URL: http://eprints.lse.ac.uk/104324/
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    Cited by:

    1. Yui Omori, 2021. "Preference Heterogeneity of Coastal Gray, Green, and Hybrid Infrastructure against Sea-Level Rise: A Choice Experiment Application in Japan," Sustainability, MDPI, vol. 13(16), pages 1-16, August.

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    More about this item

    Keywords

    Seawalls; Hedonic valuation; Coastal erosion; Property values;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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