An economics primer for coastal zone management : basic concepts and methods from microeconomics, public finance, and environmental and resource economics

Abstract

While the economic impacts of resource use pervade discussions of coastal zone management, most discourses tend to be ill-defined and incomplete, and to lack a solid basis in economic theory. This primer was written to eliminate this confusion for those non-economists who seek insight into economic thought and into how economic analysis can contribute to coastal zone management. The first half of the report introduces readers to basic concepts and analytical methods in microeconomics, public finance, and environmental and resource economics. The foundation for monetary valuations becomes apparent as the concepts are explained. The realization that neither markets nor prices are required for economic valuations is an important result of the explication. Consequently, one can assess losses associated with pollution, reduced access, and so on in units that are commensurable with market-oriented development. The second half of the primer inculcates these basic concepts and methods through (1) critiques of several stereotypical, pseudoeconomic arguments, (2) a case study of the benefits of protecting water quality for recreation, and (3) a benefit-cost analysis of a hypothetical acquisition program that is intended to protect groundwater quality, to protect opportunities for aquatic recreation, and to reduce the growth in traffic.