T He B Enefits and a Ncillary C Osts of C Onstructed

In the aftermath of post-tropical cyclone Sandy, the federal government allocated approximately $4.5 billion to the US Army Corps of Engineers to construct dunes and fortify beaches against future storm surge and sea level rise. From a policy perspective, an important question is whether the benefits generated by these projects justify their costs. This paper treats the temporal and spatial variation in dune construction along Long Beach Island, NJ in the 12 years prior to Sandy as a quasi-experiment that can be used to estimate the benefits to property owners of these largescale geoengineering projects. Using several identification strategies including a doubly robust Oaxaca-Blinder estimator, my results suggest that housing prices increased by 2.4 to 6.4% as a result of dune construction, with my preferred estimate implying a 3.6% capitalization effect. I then decompose this average effect into three components: 1) storm protection, 2) ocean view effects, and 3) recreational access effects. The latter two components are empirically found to be negative in my study area, implying that the storm protection benefits of constructed dunes are partially offset by ancillary costs associated with lost ocean views and increased visitor access.