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For most of the past week a private surfing contest has closed off Steamer Lane - one of California's most popular waves - while paying only a few hundred dollars in permit fees. I think this is far too cheap.

Consider the following thought experiment: If somebody were to set up at the beach and offer \$1 to each surfer who stays out of water they'd all decline. However, if the amount were upped to \$100, several would accept. To me this indicates that the price to close off the beach should be tens of thousands of dollars rather than a few hundred.

Is this a reasonable way to price externalities? Is there some other model where it would make sense to charge only a few hundred dollars for beach closures?

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    $\begingroup$ Some questions: (1) Who owns the beach? (2) Is anyone free to pay "a few hundred dollars in permit fees" to book the beach and close it off to the public? $\endgroup$ – Kenny LJ Jan 14 at 3:42
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    $\begingroup$ Probably also relevant— does this surfing contest bring significant revenue to the community, outside of the permit fees? $\endgroup$ – dismalscience Jan 14 at 4:10
  • $\begingroup$ The beach is public land accessible to the public unless you pay for a permit to host an event. Everyone is free to get a permit. $\endgroup$ – dranxo Jan 14 at 4:52
  • $\begingroup$ The economic benefit to the city is negligible. $\endgroup$ – dranxo Jan 14 at 4:53
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    $\begingroup$ If everyone is free to book the beach for a week for a few hundred dollars, then why isn't it booked (and indeed overbooked) all year round? I imagine even renting a small apartment nearby would cost more than that. $\endgroup$ – Kenny LJ Jan 14 at 5:05

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