In Harm's Way: Does Federal Spending on Beach Enhancement and Protection Induce Excessive Development in Coastal Areas?

Rapid economic growth along shorelines places property in harm's way because of exposure to storms, and has sparked debate about the government's role in attenuating the associated risks faced by beachfront property owners. This paper analyzes the effects of government shore protection activities. Additional development that takes place in shoreline areas because of shore-protection projects provides net social benefits, even when more property is placed in harm's way. Our empirical analysis shows, however, that growth in beachfront communities has been prompted mainly by rising income and employment in inland areas, rather than by public investments in shore protection.