Sea Grant & FEMA Research

During 1997-1999, researchers at the University of Georgia conducted two studies into how coastal hazards such as erosion, storms and flooding impact tourism and property prices. The first study was funded by the Georgia Sea Grant College Program. The second study, mandated by the US Congress under the National Flood Insurance Reform Act of 1994, was funded by the Federal Emergency Management Agency and the H. John Heinz III Center for Science, Economics and the Environment.

To make a long story very short, we found that flooding and erosion hazards, and the actions taken against them, were major determinants of tourism and property prices in coastal areas. Flood insurance, however, was not found to have a statistically significant role in the real estate market. Also, the demand for flood insurance was found to be unresponsive to changes in insurance prices.

If new construction were built inland from the 60-year erosion hazard area, property prices would increase and disruptions to the coastal ecosystem might be reduced. Coastal armoring increased the value of waterfront properties but if the recreational beach became degraded then the resulting loss of tourism would reduce inland property prices sharply. Counteracting erosion by a sand nourishment project may prevent degradation, but future beach maintenance costs may be very high.

Introduction

Executive Summary

Sections 1 & 2

Section 3

Section 4

Section 5

Return to www.agecon.uga.edu