An Economic Solution to Crowding on Public Beaches

New research shows charging entrance fees at Gulf Coast beaches can reduce congestion.

Stretching about 1,200 miles from Florida to Texas, the Gulf Coast is home to 64 million Americans. With popular destinations like Corpus Christi, Destin, and the Florida Keys, it is no surprise that tourism is a key contributor to the economies of the Gulf Shore states. But tourists are often concerned about crowding on those beaches. Tourists and locals alike want beautiful, clear beaches where they do not have to fight for parking or struggle to find a place to enjoy the shoreline. So how can we avoid congestion at these beaches and preserve the land for future generations? According to new research forthcoming in the journal Land Economics, the answer may be gate fees.

Gate fees are collected at beach entrances and allow semi-exclusive access for a beach visitor. Research from Roger von Haefen, a professor at NC State University, and Frank Lupi, a professor at Michigan State University, suggests that imposing gate fees at crowded beaches along the Gulf Coast could ease congestion while also generating much needed funds for maintenance and repair projects. Their research, which combines an economic model of beach visitation with survey data, also shows that gate fees would have a lower burden on local versus out-of-town visitors.  Such a fee could have a disproportionate impact on low-income families, although means-tested discounts could offset this.

According to von Haefen, congestion at beaches is a classic example of what economists refer to as an “externality.” Externalities arise when individuals consider only their private benefits and costs and not third-party spillover effects. If visitors account for the congestion costs their presence adds to and therefore take fewer trips, all beach goers would benefit. Following a long tradition in economics, he suggests imposing a gate fee whereby visitors pay a fee proportional to the externality costs their trips generate.

The researchers developed an economic framework of beach trips that models how people would respond to gate fees at Gulf Coast beaches and then used survey data collected in 2012 and 2013. The data was collected from 41,000 phone interviews of residents from throughout the United States and includes information on how often they traveled to Gulf Coast beaches over the past six months.

There is already some evidence that in addition to solving beach overcrowding, gate fees would infuse beaches with much-needed funds for repair projects, staffing and maintenance. For example, the state of New Jersey and many European countries use gate fee revenue to finance large-scale projects such as beach nourishment and restoration.

“Federal funds allocated to public lands and national parks have been inadequate for decades, and thus a backlog of maintenance and repair projects have accumulated,” von Haefen said. New government funds to address this backlog have been allocated with the Great American Outdoors Act of 2020, but “real funding needs remain. That’s where the revenue from the gate fees comes in.”