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Benefits and ancillary costs of natural infrastructure: Evidence from the New Jersey coast
Institution:1. Department of Economics, Michigan State University, United States;2. Lamont-Doherty Earth Observatory, Columbia University, United States;3. World Bank, United States;4. Department of Energy and Environment, TERI University, India;2. Department of Agricultural and Resource Economics, University of Maryland, 2200 Symons Hall, College Park, MD 20742, United States;1. Department of Economics, University of Wyoming, 1000 E University Dept 3985, Economics, Laramie, WY 82071, USA;2. George Perkins Marsh Institute and Department of Economics, Clark University, Worcester, MA 01610, USA;1. Graduate Program in Ecology and Evolution, Dept. of Ecology, Evolution, and Natural Resources, Rutgers University, 14 College Farm Road, New Brunswick, NJ 08901, United States;2. Dept. of Human Ecology, Rutgers University, 55 Dudley Rd., New Brunswick, NJ 08901, United States;3. Dept. of Ecology, Evolution, and Natural Resources, Rutgers University, 1 College Farm Road, New Brunswick, NJ 08901, United States;4. Sasaki Associates, 64 Pleasant Street, Watertown, MA 02472, United States;1. Waikato Management School, University of Waikato, New Zealand;2. Durham University Business School, UK, University of Waikato, New Zealand and University of Verona, Italy;1. Stanford University, Natural Capital Project, Woods Institute for the Environment, Stanford University, 371 Serra Mall, Stanford, CA 94305, USA;2. Stanford University, Center for Ocean Solutions, Woods Institute for the Environment, 473 Via Ortega, Room 193, Stanford, CA 94305, USA;3. Central Coast Wetlands Group, Moss Landing Marine Laboratories, 8272 Moss Landing Road, Moss Landing, CA 95039, USA;4. Stanford University, Natural Capital Project, c/o School of Environment and Forest Sciences, University of Washington, Box 352100, Seattle, WA 98195, USA;5. ESA PWA, 740 Front Street Suite 345B, Santa Cruz, CA 95060, USA;6. Santa Cruz County, Environmental Health Services, County Governmental Center, 701 Ocean Street, Room 312, Santa Cruz, CA 95060, USA
Abstract:This paper empirically estimates the economic impacts of a large-scale public investment in natural infrastructure aimed at adapting to climate change and increasing coastal resilience. I utilize temporal and spatial variation in investment in dunes to provide a hedonic property value estimate of the economic benefits. I identify the net effect of treatment utilizing the doubly robust Oaxaca-Blinder estimator and show that coastal housing price increases attributable to constructed dunes are approximately 3.6%. A decomposition of the average impact suggests that the policy intervention generates ancillary costs related to impaired ocean views and privacy concerns that partially offset large protection benefits.
Keywords:Dunes  Natural infrastructure  Climate adaptation  Oaxaca-Blinder  Hedonics  Policy evaluation
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