OCS Study 

•

MMS 2003-013 

Valuation of Coastal Resources – 

Understanding Substitution in Time 

and Space 

Final Technical Summary 

Final Study Report 

U.S. Department of the Interior 

Minerals Management Service

Pacific OCS Region 

Valuation of Coastal Resources – 

Understanding Substitution in Time 

and Space 

Final Technical Summary 

Final Study Report 

Authors 

Robert T. Deacon 

Charles D. Kolstad 

Principal Investigators 

Prepared under MMS Cooperative 

Agreement No. 14-35-0001-30758 

by 

Coastal Marine Institute 

Marine Science Institute 

University of California 

Santa Barbara, CA 93106 

U.S. Department of the Interior 

Minerals Management Service Camarillo

Pacific OCS Region March 2003
Disclaimer 

This report has been reviewed by the Pacific Outer Continental Shelf Region, Minerals Management 

Service, U.S. Department of the Interior and approved for publication. The opinions, findings, 

conclusions, or recommendations in this report are those of the authors, and do not necessarily reflect 

the views and policies of the Minerals Management Service. Mention of trade names or commercial 

products does not constitute an endorsement or recommendation for use. This report has not been 

edited for conformity with Minerals Management Service editorial standards. 

Availability of Report

Extra copies of the report may be obtained from: 

U.S. Dept. of the Interior 

Minerals Management Service 

Pacific OCS Region 

770 Paseo Camarillo 

Camarillo, CA 93010 

Phone: 805-389-7621 

A PDF file of this report is available at: 

http://www.coastalresearchcenter.ucsb.edu/CMI/ 

Suggested Citation 

The suggested citation for this report is: 

Deacon, Robert T., and Kolstad, Charles D. Valuation of Coastal Resources – Understanding 

Substitution in Time and Space. MMS OCS Study 2003-013. Coastal Research Center, Marine 

Science Institute, University of California, Santa Barbara, California. MMS Cooperative Agreement 

Number 14-35-0001-30758. 12 pages. 
Table of Contents 

FINAL TECHNICAL SUMMARY 1

FINAL STUDY REPORT 5

Valuing Beach Recreation Lost in Environmental Accidents 5 

 Introduction 5 

 

Beach Attendance 5 

 “But For” Reported Attendance 6 

 Correcting Reported Attendance 6 

 

Valuation Methods 7 

 Empirical Methods for Valuing Beach Recreation 7 

 Benefits Transfer 8 

 Survey of Empirical Studies 9 

 Summary of Empirical Studies 10 

 

Conclusions 10 

 

Appendix I. Estimating Open Access Beach Visits 

 Using Aerial Photos and Surveys 10 

 Number of People on Beach 11 

 Duration of Beach Visits 11 

 Estimating Visitation 11 

 

Acknowledgements 12 

 

Appendix II. References 12 

List of Tables and Figures 

Table 1. Reported Attendance versus Attendance Estimated 

 From Aerial Photographs 7 

Figure 1. Summary of Identified Saltwater Beach Valuation Studies 8 

 

Valuation of Coastal Resources – Understanding Substitution in Time and Space 

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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: 1

Economics, 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 

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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 

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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. 
Final Technical Summary – Deacon and Kolstad 

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Valuation of Coastal Resources – Understanding Substitution in Time and Space 

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FINAL STUDY REPORT 
Final Study Report – Deacon and Kolstad 

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Valuation of Coastal Resources – Understanding Substitution in Time and Space 

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Final Study Report – Deacon and Kolstad 

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Valuation of Coastal Resources – Understanding Substitution in Time and Space 

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Final Study Report – Deacon and Kolstad 

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Valuation of Coastal Resources – Understanding Substitution in Time and Space 

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Final Study Report – Deacon and Kolstad 

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The Department of the Interior Mission 

As the Nation's principal conservation agency, the Department of the Interior has responsibility for most 

of our nationally owned public lands and natural resources. This includes fostering sound use of our 

land and water resources; protecting our fish, wildlife, and biological diversity; preserving the 

environmental and cultural values of our national parks and historical places; and providing for the 

enjoyment of life through outdoor recreation. The Department assesses our energy and mineral 

resources and works to ensure that their development is in the best interests of all our people by 

encouraging stewardship and citizen participation in their care. The Department also has a major 

responsibility for American Indian reservation communities and for people who live in island territories 

under U.S. administration. 

The Minerals Management Service Mission 

As a bureau of the Department of the Interior, the Minerals Management Service's (MMS) primary 

responsibilities are to manage the mineral resources located on the Nation's Outer Continental Shelf 

(OCS), collect revenue from the Federal OCS and onshore Federal and Indian lands, and distribute 

those revenues. 

Moreover, in working to meet its responsibilities, the Offshore Minerals Management Program

administers the OCS competitive leasing program and oversees the safe and environmentally sound 

exploration and production of our Nation's offshore natural gas, oil and other mineral resources. The 

MMS Royalty Management Program meets its responsibilities by ensuring the efficient, timely and 

accurate collection and disbursement of revenue from mineral leasing and production due to Indian 

tribes and allottees, States and the U.S. Treasury. 

The MMS strives to fulfill its responsibilities through the general guiding principles of: (1) being 

responsive to the public's concerns and interests by maintaining a dialogue with all potentially affected 

parties and (2) carrying out its programs with an emphasis on working to enhance the quality of life for 

all Americans by lending MMS assistance and expertise to economic development and environmental 

protection.