Coastal Processes, Hazards, and Society

Quantitative or Qualitative


Cost-benefit Analysis: Quantitative or Qualitative?

Some of these costs and benefits can be assessed quantitatively in terms of dollars spent, saved, or earned. Construction, maintenance, and operation costs can be estimated and compared for different strategies: for example, the costs of continuing to replenish and maintain a sandy beach versus the cost of replacing it with a sea wall (including the cost of maintaining the sea wall and operating any gates or other features). Economic costs and benefits– including jobs created to build or maintain new infrastructure; impacts on major local industries such as shipping, fishing, or tourism; and effects on property values – can also be modeled, quantified, and compared.

However, other types of costs and benefits may not be easily assessed in dollar terms. Rather than use quantitative analysis, these benefits, and costs should be assessed qualitatively using a subjective scoring system. The first example in this section – reducing vulnerability by managing retreat or beach nourishment/restoration – is assumed to be quantifiable in terms of dollars saved. This may be true for the exposure component of vulnerability, which can be quantified in terms of changes in the number and value of homes and businesses exposed to sea level rise-enhanced flooding. However, it is much more difficult to assign a dollar value to changes in the social dimensions of vulnerability, such as the reductions to residents’ adaptive capacity that may occur if managed retreat from a coastal neighborhood disrupts social networks. Instead of assigning a dollar value to the residents’ adaptive capacity, stakeholders in a participatory planning exercise can assign subjective scores, perhaps by rating the costs and benefits for residents’ adaptive capacity on a scale of 1 to 10 for each policy option. Average cost and benefit scores are compared to determine which option would be most beneficial (or least costly) for adaptive capacity. These subjective cost-benefit scores can then be reweighted (multiplied by a constant value) so that they can be compared and combined with scores for other types of costs and benefits, including those assessed in dollar terms.

Like social vulnerability, environmental and design/livability costs and benefits can be challenging to quantify. For environmental costs and benefits, it may be possible to assign a dollar value using an ecosystem services model, which prices the cost or benefit of a change to environmental functions in terms of its value to society. For example, the environmental benefits of a strategy that maintains or increases the extent of coastal wetlands could be quantified in terms of the wetland’s increased ability both to protect coastal property from storm surge and to provide habitat for commercially valuable fish.

Aerial view of South Florida’s mangrove wetlands.
South Florida’s mangrove wetlands provide several benefits to coastal residents. Some of these benefits – such as their ability to protect property from storm surge – may be quantifiable using an ecosystems services model. However, some benefits these wetlands provide – such as habitat for endangered species and natural beauty – may be best assessed qualitatively.

In Module 9 we looked at an example of cost-benefit analysis for managed realignment in the United Kingdom and considered the benefits of ecological services provided by coastal marshes, and how they add to the benefits of managed realignment projects.

However, this increase in wetlands could provide other benefits – such as habitat for an endangered species – that are more difficult to quantify. Similarly, impacts of a strategy on community design/livability – such as making a community more attractive and walkable or providing better access to amenities such as grocery stores or public transportation – could be quantified in terms of changes in public health and transportation costs, but aesthetic considerations would remain highly subjective and are better assessed qualitatively.

Costs and benefits associated with equity and compatibility with local plans and goals may be the most difficult to quantify. Equity considers who will pay and who will benefit from implementing a given strategy. For example, although a cost-benefit analysis may show that the benefits of a particular strategy far outweigh the costs, equity considerations may reveal that wealthy landowners or corporations will receive most of the benefits, while the most vulnerable and disadvantaged stakeholders will bear most of the costs. In this situation, stakeholders may decide that the large decreases in equity associated with implementing such a strategy outweigh its other benefits.

As we saw with the example of Toms River, NJ, strategies for preparing for sea level rise can be seen as an obstacle to existing plans or goals – such as attracting new businesses, maintaining tourism, or increasing the stock of affordable housing, and can complicate cost-benefit analysis. If stakeholders oppose a strategy due to these conflicts, the strategy could be ranked higher in the cost column than if there were no conflicts of this kind.