Sea-Level Rise, Drinking Water Quality and the Economic Value of Coastal Tourism in North Carolina

Abstract

We estimate the economic benefits of avoiding reductions in drinking water quality due to sea level rise accruing to North Carolina (NC) coastal tourists. Using stated preference methods and responses from recent coastal visitors, we find that tourists are 2%, 8%, and 11% less likely to take an overnight trip if drinking water tastes slightly, moderately, or very salty at their chosen destination. The majority of those who decline a trip would take a trip to another NC beach without water quality issues, others would take another type of recreational trip, with a minority opting to stay home. Willingness to pay for an overnight beach trip declines with the salty taste of drinking water. We find evidence of attribute non-attendance in the stated preference data, which impacts the regression model and estimates of the willingness to pay for trips. Combining economic and hydrological models, annual aggregate benefit losses due to low drinking water quality could be as high as $232 million by 2040.