In 2002, a surfer named Chad Nelsen enlisted an economist at Duke University to help put a price tag on a popular surfing spot on Puerto Rico’s northwest coast. Nelsen’s idea was novel: to prove that the waves breaking on the beach constituted a multimillion-dollar asset and persuade the local town to take pains to preserve it.
Real estate developers were after another multimillion-dollar asset: the views from the beach, which would be the selling point for three high-rise condominiums they planned to build.
Surfers and environmentalists feared that the construction at Rincon, the village in Puerto Rico, would change the flow of sediment around the beach and bury a reef that created the surf break. Nelsen sought to show that without the reef, there would be no waves, no surfers and, ultimately, a big drop in tourism dollars.
“We found that people were buying second houses there just for the surfing,” said Linwood Pendleton, the Duke economist who assisted Nelsen and is a chief economist for the National Oceanic and Atmospheric Administration. “It was contributing literally millions of dollars a year to the local economy.”