COOPERATIVE PROVISION OF EROSION PROTECTION - AN EMPIRICAL-ANALYSIS OF THE LAKE-ERIE SHORE

Officials involved in coastal erosion management have a wide set of po licy options at their disposal. A subjective evaluation of each manage ment option would estimate the benefits received by different groups o f coastal users, establish the cost of the policy option, and formulat e an optimal method to finance the policy. This article presents an ex ample of this management approach via an empirical analysis of group f ormation among private property owners of the Ohio portion of the Lake Erie shore. A hedonic price model of erosion protection benefits is p resented An erosion protection cost function associated with a standar d erosion control device is developed from the literature and expert o pinion. Using benefit estimates for a sample of 228 homeowners and the cost function, the net benefits from belonging to a cooperative group are calculated under average cost and marginal cost allocation rules. Compared with ''going it alone,'' it is found that group formation un der an average cost allocation rule increases modestly the number of h ouseholds for which protection is economically viable, while a margina l cost allocation rule results in a more substantial increase.