An economic valuation of Mavericks

Save The Waves recently completed a study looking at the non-market value of the Mavericks area (wave and adjacent park). The study was conducted by Dr. Makena Coffman and Dr. Kimberly Burnett from the University of Hawaii. They based their findings on an on-site survey of visitors over a 6 month period in 2009. They used the Travel Cost Method to determine the non-market value (consumer surplus) of those visitors and their estimated an annual value ($24 million/year) using their best guess on annual attendance to the area.

Here are some of the key findings:

• The average visitor received $56.7 in consumer surplus per visit

• 7% of those interviewed were there to surf Mavericks

• ~12% were visiting to watch surfing
  

• Surfers were nearly 5 times more avid than other visitors

• They estimated 421,431 visits to the Mavericks area per year
  

• The total economic benefit from the Mavericks region is $23.8 million/year

• This study did not include the annual contest in their analysis
  

It is important to note that the study included all visitors to the Mavericks areas, not only surfers or those watching surfers, so this value includes the value of the whole Mavericks area.

The final study has not been published yet. Once it does, I'll post it.



You can read a Half Moon Bay Review article about the study here.

The article got a few things confused and Deal LaTourrette, the Excutive Director responded:

Dear Editor,

We appreciate the coverage of the recently released results from our Mavericks economic study in Greg Thomas’ November 11th article, “The $24 Million Wave,” but feel compelled to clarify some key points with your readers:

1) While the study was designed to measure the economic value of the surf break and surrounding area, it also attempts to measure non-economic valuation factors such as the cultural, social and environmental value of the wave. The study is not all about dollars and cents, and a key finding was completely omitted from Thomas’ article: "Almost 90% of the respondents labeled surfing an ecotourism activity, and thus important to the cultural and environmental health of the community. Respondents believed that Mavericks helped to positively define the Half Moon Bay area." This underscores the importance of these studies to be used as a tool to help policy-makers make conservation decisions that allow ecotourism to thrive, while at the same time preserving unique environmental, social, and cultural phenomena.

2) This research project was funded by a grant from the Morgan Family Foundation. Mavericks Surf Ventures helped by supplying information on the area and connecting researchers with key local organizations, such as the Half Moon Bay Chamber of Commerce. MSV and Jim Beam DID NOT fund or financially support the study.

3) The Center for Responsible Travel at Stanford University and the University of Hawaii Economic Research Organization, co-authors of the study, are independent researchers who were commissioned by Save The Waves to execute an academic study. They have no affiliation with Save The Waves, nor did commercial interests influence the study in any way.

Thanks for helping us clear up these important points.

The Cost of Poor Water Quality at Surfrider Malibu

Surfrider Beach at Malibu needs no introduction. Unfortunately, neither do the water quality problems. Malibu has been a chronically polluted beach for decades, consistently getting an "F" on Health the Bay's beach water quality report card. One of the primary culprits is over-capacity and improperly sited septic systems. For years, the City of Malibu has resisted constructing sewage systems as an anti-growth measure while polluting nearby beaches.



Thanks to a strong coalition that included the Malibu Surfing Association, Heal the Bay, Santa Monica Baykeeper and the West LA / Malibu Chapter of the Surfrider Foundation this all changed last Thursday when the LA Regional Water Quality Control Board voted to eliminate septics from Malibu and force the City to install waste water treatment systems. Read more about the outcome here and here and in the LA Times here.

$: Poor water quality is a public health burden that has costs.

Water quality contamination can cause skin rash, eye and ear infections, significant respiratory disease and Gastrointestinal (GI) illness. These illnesses have a variety of economic costs -- ranging from medical expenses to lost time at work to non-market impacts.

At Malibu, Given and Pendleton (2006) estimated that were were 25,000 to 100,000 excess GI illness (meaning above allowable level of illness at clean beaches) in Malibu due to poor water quality.

This results in $1.1 to $4.2 million in public costs annually due to illness associated with contaminated water in Malibu.

$: Clean water has benefits.

Clean water attracts more visitors who spend money (economic impacts) and clean water increase their enjoyment (consumer surplus).

Hanemann & Pendleton (2004) looked at economic benefits of improving beach water quality at Malibu Surfrider Beach by one letter grade. From a C to a B.

They showed that improving water quality at Malibu Surfrider would have two impacts on beach goers. First, the number of trips taken to Surfrider beach would increase by 1,538 visits per year.

The second major impact of an improvement in water quality is the annual consumer’s surplus of beach users improves by more than $140,000/ year.

In addition, the total economic impact (local spending) would increase by $45,000/year.

These are the benefits for one grade. The benefits would be much higher for a 3 or 4 grade level improvement (F to B/A)*.

*The model is nonlinear so you cannot use these figures to extrapolate directly.

These studies show that improving the water quality in Malibu will reduce the high public welfare burden associated with poor water quality and result in increased visits, increased societal benefits (consumer surplus benefits) and increase economics impacts (spending associated with beach visits).

You can read more detail and see the references in my testimony here.

The swell of surfing tourism

SURFING has emerged as an X-factor in the Tweed Shire's economy, after the Gold Coast estimated the sport injected billions of dollars into the city each year.

A recent Surf Industry Development Report, which was a world first, found $2 billion in activity was attributable to the surfing industry on the Gold Coast, making it the city's third biggest industry.

The report estimated the sport generated up to a further $3 billion in output and created 21,760 employment positions paying $1 billion per annum in wages and salaries.

Jim Wilson, General Manger of Connecting Southern Gold Coast said the report showed the southern Gold Coast's economy relied heavily on its pristine beaches.

“That is why we all must respect and not tamper with what nature has created. We need our region to continue to offer up waves of excellence and consistency, as this is what the surfing industry and other businesses depend on to underpin the true surfing experience on the Gold Coast,” Mr Wilson said.

Read the whole thing here....

SurfEcon Myth Busting: Surfers are lazy

Sunrise Surfer from LA times

This morning, I woke up at 4:45 AM to go for a surf at dawn. I suffered through the groggy transition to wakefulness hoping to get better morning conditions and to beat the summertime crowds. I was in the water by 5:30 - 6 guys out. By 6:30 the water was already started to get crowded and by 7:30 is was packed - on a Sunday AM.

I returned home to find these two Facebook messages. Many surfers get up very, very early to go surfing either to get the best conditions (the wind if often blowing offshore), beat the crowds or to get a surf in before work or family obligations.


(Names blurred to protect the committed)

These early beach visits are one of the reasons why surfers are so hard to intercept when economists study beach visitation.

Every morning around the country legions of surfers are waking in the dark, heading to their favorite spot, often changing into a wetsuit before jumping into the chilly ocean at first light. This phenomenon is so common is has its own name - "dawn patrol".

Lazy? I don't think so.

The Coasts & CZMA: A Stimulus for the U.S.

This morning Dr. Linwood Pendleton provided a federal congressional briefing on the coastal economy and the importance of investing in the Coastal Zone Management Act, which provides the management framework for balancing conservation and development in our coastal communities. Here are a few tidbits from Linwood's testimony:

If coastal counties in the US were their own country they would have the world's second largest economy.

The coastal economy is more complex than the rest of our economy because the natural foundations upon which it is based are fluid and constantly changing.

In 2008, the total funding for state coastal programs was only $65.5 million with a cap of $2 million for each of 34 states with coastal programs.

Keep in mind, the coastal economy contributes 5 times more to GDP than the financial sector.

You can read Linwood's entire briefing here: The U.S. Economy Needs the Coastal Zone Management Act.

Effective management of our coasts is essential to protect water quality, beach access, beaches, coral reefs and coastal communities - all elements that are essential to protecting and enjoying our favorite surf spots. As surfers, beach goers and coastal community members, we should all support federal investment in the Coastal Zone Management Act.

The briefing was sponsored by the Coastal States Organization.

Dr. Pendleton is the Senior Fellow and Director of Economic Research at The Ocean Foundation and directs the Coastal Ocean Values Center.

You can keep up with Coastal Values at: www.twitter.com/coastalvalues

If Long Beach had surf, would more people visit?

Image from Surfline.

The obvious answer to this question is yes. The more challenging question is how many people would come to surf. Predicting how many people would come to visit Long Beach to surf would likely depend on the quality of the surf and how often the surf was good.

The Long Beach Chapter of the Surfrider Foundation has a long running campaign to "Sink the Breakwater and Restore the Shore"



As part of their campaign they convinced the City of Long Beach to do a feasibility study of the breakwater removal. Part of that study was an economic analysis of the benefits to tourism resulting from improved water quality, beach conditions & surfing.

To better understand how the surfing would improve and how many surfers might visit, the Chapter contracted with Sean Collins at Surfline (a leading surf forecasting site) to use their models, historical surf records and expertise to predict how many days of surf Long Beach would see, how many good days and how many poor days and then estimated how many surfers would show up to surf it.

You can read this very interesting report here.

So what's the conclusion? Based on this approach, Collins estimates that restoring surf to Long Beach could result in over 394,000 annual visits.

This visitation estimate is being fed into an economic analysis that should be available in mid-July. We'll report on that when its available.

Duke Kahanamoku surfing in Long Beach before the breakwater was installed.

New York Surfers Defy Surfer Stereotype

Photo from: Tyler Hicks/The New York Times

A recent article from the NY Times about surfer's objections of an offshore LNG facility in New York had this quote:

“Our community is both much bigger and far more diverse than people give it credit for,’’ said Chris Wade, the chairman of the Surfrider Foundation’s New York City chapter and one of the organizers of Saturday’s protest. “The average outsider who doesn’t surf has stereotypical ideas of who a surfer is and where they live and we defy those stereotypes here in New York.”

Chris is right and he's also a classic example of someone who defies the surfer stereotype - he was an infantry officer in the Marines, he has an Ivy League education, he has a Masters in History from Duke University, he's a teacher and a very active volunteer for the Surfrider Foundation.

He's also not alone and its also not only a phenomenon in New York.

A paper I wrote on the socioeconomics of surfers Trestles in Southern California had similar findings - surfers tend to be fully employed, well educated and earn high incomes. They essential reflect the communities they come from - that probably shouldn't be a surprise.

To help better understand who surfer's are, Surf First has launched a national survey of surfers to better understand their demographics, surfing habitats and economic impacts to coastal communities. You can check out the survey here.

Impacts of Coastal Development on Surfing

Nicolas Corne recently published an interesting paper entitled, "The Implications of Coastal Protection and Development on Surfing" in the Journal of Coastal Research (reference and link below).

The paper is noteworthy because it is one of the only attempts to quantify if coastal structures (groins, jetties, seawalls, breakwaters) are good or bad for surfing. This is common topic of debate within the Surfrider Foundation because we typically fight against coastal structures because they tend to alter coastal process, harm beaches and can destroy surf spots. On the other hand we are aware that many surfing areas are the result of shoreline structures (many of which have still have other negative consequences). This is especially true on the East Coast of the US where there are few natural reefs to make surf spots.

Not too surprisingly this paper finds that coastal protection structures do both, but with the bad out weighing the good for the projects analyzed. Here are some of the other notable elements of the paper.

• Because physically measuring the physical features of a surfing wave is extremely challenging (here is one attempt at Pleasure Point in Santa Cruz), Corne relies on user surveys to guage perceptions on the change in quality and crowds.
  

• It was found that crowds decreased when wave quality decreased as expected, but surprisingly there were no cases were it was reported that the crowd increased when the surf improved. As suggested this has a lot to do with the proximity of substitute sites.

• The results show that seawalls, emergent break waters and beach fill tend to reduce wave quality, where as jetties tended to improve wave quality. The "other categorey and "combo" projects showed mixed results.

This paper had a number of short comings that challenge its validity that put it at risk of being a formalization of surfing anecdotes.

• The survey frame is largely Surfrider Foundation members who may have a bias against shoreline structures that is reflective of the organization's beach preservation policy.

• The paper doesn't say how many people were surveyed so its impossible to know if the responses are based on one persons opinion or if the results had a wide variation in responses (error bars)

• The survey asks questions about some places that were altered 10 to 15 years ago (e.g the Wedge in Newport Beach) and it begs the question whether survey respondents are able to truly recall changes in surf quality or if crowds have changed for reasons other than wave quality (the author does acknowledge this shortcoming).

This paper represents a first attempt to quantify the impacts of coastal protection on surfing, which is an admirable research topic. I believe using crowds as a proxy for surf quality is a sound means of estimating changes over time and is something that warrants further research.

Attendance data at surf spots is essential information to better understand the economics, protection and management of surfing areas but has proven difficult to find.

Reference:

CORNE, N.P., 2009. The implications of coastal protection and development on surfing. Journal of Coastal Research, 25(2), 427–434. West Palm Beach (Florida), ISSN 0749-0208.

Download it here.


Thanks to Linwood Pendleton from the Coastal Ocean Values Center for his comments on this post.

Monster Wave in Super Slo-Mo

High-definition cameras shooting 600 frames reveal the inner dynamics of Monster Waves in the new BBC series South Pacific: Oceans of Islands premiered May 10 on BBC Two. The trailer above shows the first images of underwater spiralling vortices created by the wave’s action, off the coast of Pohnpei in the Caroline Islands, part of the Federated State of Micronesia. Read more about monster waves and super slo-motion techniques here at BBC Earth News.

Who's Surfing Lowers?

Surfline just posted a little photo expose on "Who's Surfing Lowers". I mapped where they came from here:


View Who's Surfing Lowers in a larger map

Although far from a random sample, I thought it was interesting that it looks somewhat familar to this map that is the result of about 1000 responses to an Internet-based survey:





Surfers are clearly willing to "go the extra mile" to surf Trestles.

Total Economic Value

Economists often try to measure the value of things. In my case I am interested in using economics to help understand the value of surfing. A common criticism of this approach, beyond the philosophical question about the need to use money to value everything, is that the value of surfing for a day doesn't really capture the entire value of the experience. That is true.

The common techniques used to capture the non-market value of surfing (or other activities) capture a lower bound. The techniques attempt to measure the value of the direct use of the resource.

To try and put that value in context the Total Economic Value framework was established. The other components require non-market valuation techniques.

The illustration above shows the Total Economic Value framework, with examples for surfing.

Read more here and here.

Nias: The Golden Pig

The Golden Pig

Documentary about the island of Nias. Provided to us by Australian film director Joel Peterson. The film showcases the dangers of modern surf colonialism, focusing on the impacts it can have on native populations.

The waves at Lagundri Bay on the Indonesian island of Nias are what dreams are made of. The Golden Pig highlights incredible early footage from surf explorer Kevin Peterson along with "first contact" interviews with locals of Nias.

The current state of Nias, surfer paradise or culture destroyed by surfing, remains debated. There is no question that surfing had a profound influence on this community.

The Surf Economics of Brevard County, Florida

Brevard County, Florida is arguably the epicenter of surfing in Florida. This region boats numerous surf spots from CoCoa Beach to Sebastian Inlet and spawned the Hobgoods and Slater.

Last week, Mike Slotkin of Florida Institute of Technology presented some stats on surfers who visit Brevard County from an internet-based survey of 240 surfers who lived outside Brevard County but visit to surf.



As you can see, surfers from throughout the state come to Brevard County to surf.











These surfers represent a full range of ages - over 40% of them are over 36 years old.













They are also well educated and earn high wages. For comparison, the median household income in Florida is a little over $46,000 and about 25% of Floridians have a college degree. These surfers are wealthy and well educated.









When they visit the county to surf they spend money in local businesses.







When you begin to add up those expenditures over a year they start to add up. As is common, the hardest number to find is the annual number of surfer visits. Here they estimated 9500 a year.






This profile of Florida surfers who visit Brevard County is similar to the demongraphics of surfers who visit Trestles. Mike shows this comparison in his presentation. You can see all the slides here (5 MB .pdf)

Thanks to Dr. Mike Slotkin and Dr. Alex Vamosi for sharing their presentation and kudos to Brian Kelly for conducting the survey.

How many surf sessions?

Earlier I posted on how many surfers there are in the US. This is a follow up about how often they surf. The same 2001 marine recreational survey used in that previous post also estimated how many visits to the beach surfers made in a year.

As the graphic above illustrates, there were a total of about 76.5 million surf visits in the US in 2000.

This means that surfers averaged about 22 surf sessions per year.

The top states for annual surf sessions were Hawaii, California, Florida, and North Carolina. The number of days of participation (visits) for the top five states could not be estimated because there was an insufficient sample size per state after the top 4.

At Trestles (a top quality wave with a avid local surf population), survey respondents reported an average annual visitation of 109 visits/year.

A study on surfer illness in Oregon found that surfers averaged 77 surf visits per year.

If I had to guess, I would say that you'd find that the average number of annual surf sessions is bimodal - there is a large number of surfers who average 5-15 days per year and then there are more avid groups along the coasts that average closer to 70-150 visits a year. More information on the behavior of surfers is needed to figure this out. Hopefully, the Surf First surfer survey will help us start to answer this question and others.

How many surfers?

I have been asked repeatedly, "How many surfers are there in [name a state or country]".

This is a surprisingly difficult question to answer. There is only one study that I know of that counts surfers for the US - a 2000 NOAA recreational survey.

Without getting into the debate about what constitutes a surfer, here are some stats for the U.S. from that study:

There are about 3.3 million people who surfed in 2000.

The top 6 states are illustrated above: California, Hawaii, Florida, North Carolina, New Jersey and Texas.

Here's a table of all states that they found surfers:



All of this info is based on a report called the "Current Participation Patterns in Marine Recreation". It was published in 2001 - see reference below. The stats are generated based on a phone survey of 50,000 homes in the US. This is the only published report on recreational surfing participation that I am aware of.

Surfing has boomed boomed since 2000 so it will be interesting to see what we find upon publication of the next marine recreation report.

This tells us how many surfers there are. A more interesting question, one that is critical to understanding the economics of surfing, is, "How many times did they surf?". Stay tuned for that answer.

You can read the whole report here:

Leeworthy, V. R. and P. C. Wiley (2001). Current Participation Patterns in Marine Recreation, U.S. Department of Commerce, National Oceanic and Atmospheric Administration, National Ocean Service, Special Projects. National Survey on Recreation and the Environment 2000: 53.

Intercepting Surfers

This is a graphical representation of typical surfing and beach going attendance patterns over a day for many places in the world. Surfers tend to visit the beach in the mornings and evening - when conditions are best and they are not at work. On the other hand beachgoing tends to happen mostly in the middle of the day. Surfers also tend to visit the beach throughout the week or when conditions are good, where as beach going more typically occurs on the weekends.

Understanding this pattern is very important when considering the economics of beach going.

Many studies on the economics of beach going rely on intercept surveys to collect their data. Intercept surveys that take place in person at a site and interview visitors while they are at the beach. It is also during this time that many attendance counts are conducted to estimate how many visitors use the beach in a given day or year.

These surveys are often conducted in the middle of the day when beach going is at its maximum. In these cases a large portion of the surf visitation may be missed. This will lead to an underestimate of the overall use of the beach and also disproportionately miss surfer visits.

This could have many implications about the value of the beach and its management.

When calculating the lost value associated with the American Trader oil spill, Chapman and Hanemann avoided this pitfall by surveying beach visitors from 6 AM to 6 PM and found that at some Orange County beaches surfers made up 10-20% of the beach visits. This is one of the only studies on beach economics that specifically made an effort to survey early and late to capture surfers.

We found a similar patter at Trestles.

Value of Local Shops to the Surf Industry

Surfline Launches Local Surf Shop Series Focusing on the Value of Local Shops to the Surf Industry
January 16, 2009
PRESS RELEASE

Today Surfline launches a new editorial series that focuses on the core value of local surf shops to the industry and the culture they provide. This editorial series will focus on surf shops and their vast knowledge of both products and surf culture as well as their understanding of what a surfer needs in terms of equipment and knowledge, all the while providing a strong community in the local marketplace. Local surf shops allow surfers a place to congregate around core industry products and provide a community and culture that has escaped the main stream surf industry. Surfline is focused on bringing this culture and community to light and show the importance to surfers and the industry in all local markets.

Surfline's VP of Editorial Dave Gilovich says, "We believe surf shops are good for surfing. Surf shops provide a place where wave riders can find the core products they need to pursue their life's passion - boards, leashes, wax, wetsuits, boardshorts. Equally important, most shops have personnel on the floor who can offer information about these products, with a degree of knowledge and understanding that can be found nowhere else. But the best surf shops are more than just retail stores. The special ones, the ones that have served their communities for years and, in some cases, decades, offer a place for surfers to gather, connect and communicate, to share the stoke of surfing and to celebrate its lifestyle and culture. These businesses have become shrines to our sport, and, as such, are important to surfers everywhere."

Visit the first part of this series today on Surfline where you can read about Harbour Surfboards in Seal Beach which has been around Since 1962.