Estimation of the economic importance of beaches in Sydney, Australia, and implications for management

Abstract

This thesis sought to estimate the economic value of selected Sydney beaches, in order to provide the necessary information to allow local and State government agencies to identify the most appropriate management response to projected climate change impacts. Three case-study sites (Collaroy-Narrabeen, Manly Ocean Beach, and a combined site in the Hawkesbury River that included the Brooklyn Baths and Dangar Island) were selected via a weighted-criteria method using an expert panel. Valuation methods were selected in response to the key coastal management challenges in the region, vulnerability to inundation and shoreline recession.

A truncated negative binomial travel cost model identified consumer surplus values of between AUD$2.72 and $20.63 for a beach day, depending on the site under investigation and the specification of the cost parameter. These are similar to those in the published literature. Aggregate values are derived only for comparison with costs of management options, due to concerns about the quality of visitation information. These comparisons suggest a strong economic argument for beach nourishment at the case-study beaches.

The Contingent Valuation (CV) method was employed to estimate the willingness to pay (WTP) of beach visitors for prevention of climate change erosion at the case-study beaches. Screening and follow-up questions were employed to identify the influence of scenario rejection on WTP responses and values. Binary probit analysis of non-protest responses resulted in average WTP of AUD$116.27± 69.63 as a one-time donation. Comparison with previous studies is not possible due to difference in contingent scenarios and payment vehicles.

The Hedonic Pricing Method (HPM) was employed to identify price premiums for beachfront property in Collaroy-Narrabeen. Significant variation in beachfront price premiums is explained by the variation in erosion risk information linked to property titles. ‘Risk-free’ beachfront properties were subject to price premiums around 264%, relative to an average property in the sample. Properties in the central portion of the beach, which is subject to greater exposure to erosion, were subject to much lower premiums, in the order of 130%. These figures are substantially higher than those in the published literature, which is a function of the exclusivity of the Sydney beachfront property market.