In the "weekly update" of Region Focus, the quarterly magazine of the Federal Reserve Bank of Richmond, Betty Joyce Nash writes about beach nourishment (Sand Dollars):
Those who benefit the most from the replenishment of Virginia Beach's sandy shores aren't the ones who pay the most.
Brave readers of the Env-Econ blog will recognize the senior (at least in age) blogger in this passage:
In November, researchers at the University of North Carolina at Wilmington and Appalachian State University completed an analysis of the recreation demand for southern North Carolina beaches. Travelers said in a survey that they would make one additional trip annually if the beaches were 100 feet wider. The value of this added demand was estimated to be $60 million a year.
...
Replacing lost sand is a public good — it benefits equally everyone on beachfront that permits common access, regardless of who shells out money for it and who doesn't. But such government intervention creates a moral hazard. "Federal funding of beach re-nourishment acts like an insurance policy for people who want to live on the beach; it's the same principle as with the federal flood [insurance] program," explains John Whitehead, an Appalachian State economist who co-authored the November paper. "If property owners think the feds are going to come in and make sure [there's] sand in front of the property, then they're not as worried about the big storms as they ought to be."
