Non-market valuation of beach quality: Using spatial hedonic price modeling in Hilton Head Island, SC

Climate change has been impacting beach quality negatively for years. The gradual increase in sea level has been slowly diminishing the Atlantic coastline by eroding beaches and worsening coastal flooding. Narrowing beach width, one of the most important attributes of beach quality, has been a major concern for policy makers, local residents and visitors as lower beach quality has environmental and economic consequences. Filling the beaches with sand under beach replenishment projects has been widely used to treat this problem. The purpose of this paper is to estimate the economic value of beach width using the past residential property prices in Hilton Head Island, SC. Spatial error hedonic price method was adopted to account for spatial dependency among error terms. The results of this study show that beach width has significant influence on the values of neighboring properties that are located within 633 feet of the shoreline. An additional foot of beach width would add as much as $3,012 to the value of an oceanfront residential property. Without an accurate estimation of the economic value of beach width, cost-benefit analyses of beach nourishment and other shoreline management projects would be incomplete.