Natural Assets: Surfing a Wave of Economic Growth | High quality waves boost global economy by $50-billion

Abstract

Many natural assets can not be valued at market prices. Non-market valuations typically focus on the value of an individual asset to an individual user, ignoring macroeconomic spillovers. We estimate the contribution of a natural asset to ag- gregate economic activity by exploiting exogenous variation in the quality of surfing waves around the world, using a global dataset covering over 5,000 locations. Treat- ing night-time light emissions as a proxy for economic activity we find that high quality surfing waves boost activity in the local area (<5km), relative to compar- able locations with low quality waves, by 0.15-0.28 log points from 1992-2013. This amounts to between US$ 18-22 million (2011 PPP) per wave per year, or $50 billion globally. The effect is most pronounced in emerging economies. Surfing helps re- duce extreme rural poverty, by encouraging people to nearby towns. When a wave is discovered by the international community, economic growth in the area rises by around 3%.