Economic Impact of Beaches

Introduction

We all know that the beaches and the ocean are an extremely important part of our lives. To some of us, living without frequent visits to the beach and immersion in the ocean would be unthinkable. But how do you put a price on that? How can the economic impact on the economy of beach communities and states with ocean coastline be measured? Surfrider is aware of three recent studies which attempt to answer those questions.

King Study

A study was performed in 1998 and published in 1999 under the direction of Dr. Philip King of the Public Research Institute at San Francisco State University. Dr. King originally studied this issue by conducting a telephone survey of over 600 residents throughout California in 1995. The randomly selected residents were asked a series of questions regarding their beach-going activities during the previous year. Results from the survey were used to calculate the total economic impact of California's beaches on the state and national economies. Data from the original 1995 survey were updated in 1998 to account for inflation, population growth, and other variables. The data from the study were then used to compare the amount of beach-related economic activity generated in California with that in another state, Delaware, that ranks just behind California in overall federal spending for shoreline preservation. Finally, the study looked in detail at the local economic impact in one well-known beach city - Huntington Beach. It is worth noting that this study was performed just prior to a rash (pun intended) of beach closures that occurred in Huntington Beach in July and August 1999 due to high bacteria readings. Those water quality problems severely impacted local beach businesses and the overall Huntington Beach economy. The main findings and conclusions of the study were as follows:

In 1998, California's beaches generated $14 billion dollars of direct revenue. When the indirect and induced benefits of this spending are added, California's beaches total contribution to the national economy is $73 billion
The Federal tax revenues generated by this beach activity are substantial. The direct Federal tax revenues generated are $2.6 billion; however, the total Federal tax revenues generated are much higher: $14 billion.
California's beaches generated 883,000 jobs across the U.S.
California receives less than one tenth as much in Federal appropriations as New York and New Jersey, which have much smaller coastlines and fewer miles of beaches.
California ranks eighth in terms of Federal appropriations for shoreline protection, just ahead of Delaware. It receives just under $12,000 per mile of coastline compared with well over $800,000 for New York and New Jersey.
While California receives twice as much in Federal appropriations for shoreline protection as Delaware (the 9th largest recipient of Federal funds) California's beaches generates 20 times more economic activity for the national economy and roughly 20 times more tax revenues than Delaware's beaches. In other words, California generates 10 times more Federal tax dollars for every dollar in shoreline appropriations it receives than Delaware.
The study of Huntington Beach indicates that much of the Federal and State tax revenues generated by local beach communities do not go back to local communities. In the survey in Huntington Beach, one-half of all spending on beach activities occurred outside the city. Further, many of the tax dollars generated within the city go to state and Federal authorities. Overall, Huntington Beach's beaches generated $135 million in Federal tax revenues and $25 million in sales tax revenues compared to only $4.8 million in local revenues from sales taxes and parking fees.

An executive summary of Dr. King's study can be viewed at his website. His website also provides a link to download the complete report.

National Ocean Economics Project

In addition to Dr. King's work, an even more comprehensive and ambitious study began in 2000 at the University of Southern California (USC). The project, titled The National Ocean Economics Project, is being lead by Dr. Judith Kildrow of USC's Wrigley Institute for Environmental Studies, with funding from the National Oceanic and Atmospheric Administration (NOAA) and the U.S. Environmental Protection Agency. The objective of this project is to provide useful data on ocean-related economic activities and resource trends to government, businesses, and individuals to assist with investment and management decisions as they attempt to balance conservation and growth in coastal areas. This project will provide the first major comprehensive, in-depth analysis of the size and composition of the U.S. ocean economy over the past 30 years. Information will be gathered in eight "market" sectors that generate economic activity:

Living Resources (includes fisheries)
Offshore Mineral and Energy Resources
Marine Transportation (includes ports and shipping)
Ship and Boat Building
Coastal Tourism and Recreation
Coastal Real Estate
Research and Development (includes oceanographic research institutions)
Coastal Construction, Restoration, Maintenance and Repair Activities (includes restoration of wetlands, the building of waste treatment plants, and the dredging of harbors)

With the study's completion, Dr. Kildrow and her fellow researchers hope to be able to answer the question: What is the ocean worth? Dr. Kildrow claims that coastal counties produce eight times the income from this country than inland counties do. "If we could understand the importance of the ocean and the coastal zone and how much [they] really contributed to the economy, perhaps we would put forth greater efforts at … preserving these coastal assets that are so valuable to our lives" she said. She is also quoted as saying "When developers go build a hotel on the beach, and somebody says, 'No, no, no, it's better to have the open space,' nobody has any good numbers for what the open space on the beach is worth - but they sure have numbers on how many jobs that hotel is going to generate. We're trying to balance that equation. We're trying to say 'Look, that hotel is worth far less if that beach and its waters aren't clean.' They're connected." More information on this important project can be found at the project website.

Making Waves Article

An article by Nathan Pierce appeared in the August 2002 issue of Surfrider Foundation's Making Waves newsletter. Charles Tilley of California State University Monterey Bay has performed a study which estimates the net value of the "Pleasure Point" surf zone in Santa Cruz, California to be $8.4 million annually. The complete article (pdf) can be found at this link.

Surfonomics Blog Posts

Several posts regarding Surfonomics (the economic impacts of surfing) can be found on Surfrider Foundation's Coastal Blog.

This article is part of a series on Beach Access looking at policies, laws, regulations and conditions which can affect the public's ability to access the coast.

For information about laws, policies and conditions impacting beach access in a specific state, please visit Surfrider's State of the Beach report to find the State Report for that state, and click on the "Beach Access" indicator link.

This article is part of a series on Clean Water which looks at various threats to the water quality of our oceans, and the negative impacts polluted waters can have on the environment and human health.

For information about laws, policies, programs and conditions impacting water quality in a specific state, please visit Surfrider's State of the Beach report to find the State Report for that state, and click on the "Water Quality" indicator link.

This article is part of a series on the Ocean Ecosystem looking at the various species of plants and animals which depend on a healthy coast and ocean environment, and the threats that can be posed to them by human activity

For information about laws, policies and conditions impacting the beach ecology of a specific state, please visit Surfrider's State of the Beach report to find the State Report for that state, and click on the "Beach Ecology" indicator link.