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Natural Assets: Surfing a Wave of Economic Growth

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  • McGregor, Thomas
  • Wills, Samuel

Abstract

Many natural assets can not be valued at market prices. Non-market valuations typically focus on the value of an individual asset to an individual user, ignoring macroeconomic spillovers. We estimate the contribution of a natural asset to aggregate economic activity by exploiting exogenous variation in the quality of surfing waves around the world, using a global dataset covering over 5,000 locations. Treating night-time light emissions as a proxy for economic activity we find that high quality surfing waves boost activity in the local area (<5km), relative to comparable locations with low quality waves, by 0.15-0.28 log points from 1992-2013. This amounts to between US$ 18-22 million (2011 PPP) per wave per year, or $50 billion globally. The effect is most pronounced in emerging economies. Surfing helps reduce extreme rural poverty, by encouraging people to nearby towns. When a wave is discovered by the international community, economic growth in the area rises by around 3%.

Suggested Citation

  • McGregor, Thomas & Wills, Samuel, 2016. "Natural Assets: Surfing a Wave of Economic Growth," Working Papers 2016-06, University of Sydney, School of Economics.
    • Handle: RePEc:syd:wpaper:2016-06
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    Keywords

    Non-market valuation; Natural capital; Surfing; Night-time lights;
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