Economic Benefits from Restoration Actions in Coastal Communities

Abstract

In this study, we measure the effect of restoration actions on the economic value of coastal communities. We use a residential sorting model to simulate residential moves between communities and then estimate the value of restoring shoreline uses in coastal communities. Our application measures the effect of cleaning up Great Lakes Areas of Concern (AOC) — which are heavily polluted coastal locations prioritized for restoration in the United States and Canada — on the willingness to pay (WTP) of residents in the U.S. state of Michigan. While prior research documents the effect of individual AOCs on residents, particularly in local housing markets, little research has examined systematically where restoration is occurring and whether it affects mobility at a regional level. The results in this paper suggest that restoration actions can affect mobility, with point estimates indicating households are willing to pay $54/year for the uses restored between 2005 and 2015 in Michigan’s AOCs.