ECONOMIC BENEFIT/COST ANALYSIS OF BEACH RENOURISHMENT

An analytical review of economic benefit/cost analysis as applied to beach renourishment projects. As conducted by those with a policy interest in beach renourishment (including but not limited to the Corps of Engineers), benefit/cost analysis of beach renourishment is often fundamentally flawed, leading to economically invalid conclusions. Discussion and examples from recent proposals will illustrate issues including: distinction between financial impact and net economic benefit; linkage between beach tourism and net economic benefit; consideration of a full range of alternatives; discounting (present value); explicit and implicit subsidies; induced behavioral changes; treatment of uncertainty; and sensitivity analysis.