The Economic Value of Coastal Amenities: Evidence from Beach Capitalization Effects in Peer-to-Peer Markets

Coastal amenities are public goods that represent an important attraction for tourism activities. This paper studies the capitalization effects of beach characteristics using hedonic pricing methods. We examine the implicit economic value of several beach characteristics like sand type, width, longitude, accessibility, or frontage in the Airbnb rental market. Using data for 16,663 Airbnb listings located in 67 municipalities of the Balearic Islands (Spain) during the summer of 2016, together with detailed information about the attributes of 263 beaches, our modelling approach considers interaction terms between the beach amenities and distance to the closest beach. Controlling for a set of listings' structural characteristics, host attributes and municipality fixed effects, we find that Airbnb guests attach economic value to beach length, the presence of vegetation, the type of coastal frontage and beach accessibility and exclusivity. However, there is no evidence of capitalization effects associated with beach width or the type of sand.