Hedonic Property Prices and Coastal Beach Width

Previous research suggests that coastal housing values capitalize the quality of nearby beaches, with distance from the shore playing a key role, and that there are potential problems related to measurement errors and reverse causation due to policy interventions. We offer the first analysis in communities that are not engaging in beach replenishment, obviating concern over reverse causation. Statistical evidence supports hedonic specifications that account for proximity to the shoreline. Using geophysical seascape measures as instrumental variables (IV) for beach width, we find mixed evidence of errors-in-variables across market segments (existing homes v. vacant lots). When we do find downward bias in marginal WTP for beach width at vacant lots, it is rather large (142\% to 350\%)