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(in many cases) to the gearing of any system that allocates public 
oods on an individual’s willingness to pay. On the other hand, the 
evelopment of the shore as vacation homesites would provide an 
immediate return on investment that is determined by a well-defined 
rice. The same is true of all capital-intensive uses for the shoreline: 
otels, motels, factories, and powerplants all begin to show relatively 
high return on investment shortly after they are put into operation. 
Recreation in general, such as ocean swimming at ai etioh! is low on the 
capital-intensive scale. Unless a developer decides to provide facilities 
on a large scale (such as amusement parks), there is little chance that 
recreational uses can compete with private, commercial, and industrial 
development. Yet, use for recreation may well represent the largest 
value to overall society although, regrettably, this value is the least 
quantifiable. As long as a public good such as shoreline recreation is 
not forced to compete with other uses, there is no need for any valua- 
tion at all. In present day circumstances, however, there is not much 
shoreline left for development, and all uses must compete on an equal 
footing. Hence, public recreation, undervalued because of the diffi- 
culties outlined above and lacking in any mechanisms to discover and 
translate true values into revenues, has been priced out of the market. 
Another way to view this problem is from the standpoint of side 
effects that accrue to future generations. We have seen that recrea- 
tional uses, low on a capital-intensive scale and undervalued as a public 
good in the private marketplace, cannot compete effectively with pri- 
vate development for commerce, industry, or housing, while these 
activities almost universally preclude other uses, especially recreation. 
Now, this consumption and subsequent exclusion of the shoreline by 
private development gives rise to the side effect of lost opportunity to 
future generatious to use this resource in its unique capacity for recrea- 
tional activity. Under normal conditions (price fixed at proper level), 
this exclusion would be an indication of a properly functioning 
market. However, in the context of undervaluation, exclusion results 
in an allocation of the good in a way that is inconsistent with the 
overall benefits and values of society, i.e., future recreationalists are 
denied use of the coast. Since information on the true value of the re- 
source for recreation is hard to determine within the framework of the 
price system, and since the transaction costs of transferring informa- 
tion of this kind (even if it were available) into revenues are prohibi- 
tive, the market mechanism fails to provide reasonable competition in 
which recreation uses could participate. If recreation values could be 
handled by the market, it is likely that the private costs for the shore- 
line would be astronomical (even relative to today’s prices) and would 
greatly alter the patterns of consumption. But since they are not, since 
the true costs (including the externality of lost opportunity for public 
recreation in the future) are not generally included in the price of 
shoreland, the public must bear these social costs while the pattern of 
private consumption and development continues unchecked. These 
factors point again to the identification of our natural shoreline as a 
public good in sore need of a means of allocation other than that pro- 
vided by an inadequate private market. 
This completes the description of the economic environment within 
which the allocation of shoreline resources takes place. But this is only 
