Grantham Seminar | Natural assets: surfing a wave of economic growth

Grantham seminar introduced and chaired by Karlygash Kuralbayeva, Research Officer at the Grantham Research Institute

Samuel Wills, ESRC Future Research Leaders Fellow at Oxford University, will present his new paper ‘Natural Assets: Surfing a Wave of Economic Growth’ co-authored with Thomas McGregor.

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 aggregate economic activity by exploiting exogenous variation in the quality of surfing waves around the world, using a global dataset covering over 5,000 locations. Treating 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 comparable 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 reduce 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%.