Valuation of Coastal Resources – Understanding Substitution in Time and Space 

1

FINAL TECHNICAL SUMMARY 

STUDY TITLE: Valuation of Coastal Resources – Understanding Substitution in Time and 

Space 

REPORT TITLE: Valuation of Coastal Resources – Understanding Substitution in Time and 

Space 

CONTRACT NUMBER: 14-35-0001-30758 

SPONSORING OCS REGION: Pacific 

APPLICABLE PLANNING AREA: Southern California 

FISCAL YEARS OF PROJECT FUNDING: FY 95 

COMPLETION DATE OF THE REPORT: November 1999 

COSTS: FY 95 - $57,399, FY 96 – no cost 

CUMULATIVE PROJECT COST: $57,399

PROJECT MANAGER: Russell J. Schmitt 

AFFILIATION: University of California, Santa Barbara 

ADDRESS: Coastal Research Center, Marine Science Institute, University of California, Santa 

Barbara, CA 93106 

PRINCIPAL INVESTIGATORS: 1

Robert T. Deacon, 2Charles D. Kolstad 

ADDRESSES: 1Economics, University of California, Santa Barbara, CA 93106-9210; 2Bren 

School of Environmental Science & Management, University of California, Santa Barbara, CA 

 93106-5131

BACKGROUND: The basic goal of this research is to better understand the losses that occur 

when a recreation site is made unavailable temporarily or on a localized basis, so that 

substitution to other nearby sites or to other times remains possible. This is often what happens 

when coastal recreation sites are closed by oil spills or construction projects. Although there 

have been numerous studies of the costs of lost coastal recreation, the literature has not focused 

on the temporary and localized nature of such closures. Rather, they have been designed either 

to consider losses that would result if a recreation site were made permanently unavailable, or the 

losses caused by the unavailability of all such sites. Consequently, the damage results reported 

may be of little relevance to the actual closures that occur. 
Final Technical Summary – Deacon and Kolstad 

2

OBJECTIVES: Our approach to remedy this has three components: (i) extending the 

theoretical basis for examining substitution across time and space, (ii) testing the resulting theory 

empirically using sites in the Santa Barbara Channel, and (iii) developing a center of excellence 

in environmental valuation that stresses student training, interaction with researchers at other 

institutions, and dissemination of research results. 

DESCRIPTION AND RESULTS: This research award was granted for work focused on the 

third of these objectives. Our aims during the first year were to build student interests and 

capabilities and to foster communication among the broader community of researchers working 

on related topics. During the first year we carried out three tasks. First, we instituted a year long 

research workshop on environmental/natural resource economics, emphasizing the valuation 

topics central to this project, directed by Professors Kolstad and Deacon. Second, we hosted a 

two day research conference at UCSB (May 17 and 18, 1996) on environmental and natural 

resource economics, with special focus on the topic of “Substitution in valuing recreational 

resources.” Third, we initiated a background program of research into theories underlying the 

valuation of recreational resources, with special emphasis on substitution issues, which primarily 

involved reviewing the literature on intertemporal substitution. 

We were granted a no-cost extension in the summer of 1996, which enabled us to continue this 

work through the 1997 academic year. We continued the research workshop begun during the 

first year. The group of students expanded to nine, due to growing interest in our department on 

natural resource and environmental issues. Two faculty from the School of Environmental 

Science and Management (Dr. Dave Kelly and Dr. Linda Fernandez) also became involved. We 

also expanded our schedule of meetings, to once per week during most of the academic year. At 

the end of each academic year, students made final group presentations on possible doctoral 

research proposals. Several visitors from other universities came to UCSB to present research 

papers on subjects related to environmental and natural resource economics, and to meet with the 

faculty and students involved in this project. These speakers are listed in the study products 

section. 

Also during the second year, we continued our program of background research into the topic of 

substitution across time, particularly in valuing recreational resources. This work involved 

surveying relevant literature on substitution in general, and on valuing recreational resources. 

We are also looking into the possibility of studying responses by recreationists to temporary 

closures of recreational resources, particularly following closures due to inclement weather on 

other natural causes. The student researcher who worked on this project during the Summer of 

1997, Jim Grefer, collected data on coastal recreation site use, looking for natural experiments, 

e.g., weather related closures, road closures, etc., that would allow us to examine empirically the 

extent to which recreationists are willing to substitute site use across time. We also made 

progress toward designing a theoretical framework for studying recreation site visitation in a way 

that would allow us to determine willingness to substitute across time. This framework is 

presently in a preliminary state, however, and research on refining it further will continue. 

Finally, we have a data set of recreational site use at Orange County Beaches, as well as data on 

weather conditions. We are studying the possibility of using this data to examine the question of 

intertemporal substitution as well. 
Valuation of Coastal Resources – Understanding Substitution in Time and Space 

3

Our research into the question of substitution across time and space, and the graduate student 

seminar/workshop program initiated under this grant, will continue into the future despite the 

fact that the funds allocated for this project are exhausted. 

STUDY PRODUCTS: 

Publications: 

Deacon, Robert T. and Charles D. Kolstad. 2000. Valuing Beach Recreation Lost in 

Environmental Accidents. J. Water Resources Planning & Mgmt 126: 374-81. 

Presentations: 

1996 Introduction, Deacon, Robert T., Conference on environmental/natural resource 

economics, May 17-18, Cliff House, UCSB. 

1996 Environmental Liabilities with Temporal and Spatial Dependence, Shapiro, Perry, 

Conference on environmental/natural resource economics, May 17-18, Cliff House, 

UCSB. 

1996 A Dynamic Characterization of Temporary Rationing: Implications for Natural Resource 

Valuation, Carson, Richard, Conference on environmental/natural resource economics, 

May 17-18, Cliff House, UCSB. 

1996 The Value of Time and Family Labor Market Structure, McConnell, Ted, Conference on 

environmental/natural resource economics, May 17-18, Cliff House, UCSB. 

1996 A Method for Non-Response Correction in the Analysis of Mail Survey Data, Cameron, 

Trudy Ann, Conference on environmental/natural resource economics, May 17-18, Cliff 

House, UCSB.