The Value and Configuration of Coastal Natural Capital

Abstract

Location is a key determinant of the value and productivity of natural assets. Coastal beaches are a particularly important class of natural asset for local economies and ecosystems; however, the magnitude of beaches’ importance is mediated by the arrangements of sand along the coastline and from sea to shore. Using high-resolution, remotely sensed data and information on property attributes and transactions, I compare estimates from three case studies along the US east coast. The capitalization of a foot of beach width in coastal Connecticut house prices is orders of magnitude lower, 0.04% of mean sale price, than that in North Carolina (1.3%) or Florida (0.8%). Whereas transferring estimates from one location to another may miss important factors for beach sand valuation that I identify (e.g. inlets and public beach access), the burgeoning availability of environmental and economic data allow replicable and scalable context-specific valuation. This exercise pieces out the contribution of a coastal environmental attribute—beach width—embedded in the capitalized value of coastal homes and demonstrates ways forward for natural capital accounting.