SURFING A WAVE OF ECONOMIC GROWTH Thomas McGregor∗ and Samuel Wills†∗ March 2017 Abstract We investigate whether the geographic determinants of growth extend to natural amenities. We combine data on spatial and temporal variation in the quality of over 5000 surf breaks globally with data on local economic performance, proxied by night-time lights. We document a strong association between natural amenity quality and local economic development. Economic activity grows faster near good surf breaks; following the discovery of new breaks, or the technology needed to ride them; and during El Niño events that generate high-quality waves. The effects are concentrated in nearby towns and emerging economies, and population changes are consistent with tourism. JEL codes: O13, O44, O47, Q26, Q51, Q56, R11, R12 Key words: Natural amenities, economic growth, new economic geography, natural advantages, tourism, surfing, night-time lights. ∗Department of Economics and Oxford Center for the Analysis of Resource Rich Economies, University of Oxford, UK. †School of Economics, University of Sydney and CAMA, ANU, Australia. The authors would like to thank Tiho Ancev, Julia Bird, Tony Butt, Damian Clarke, Matthew Collin, Mark Hemer, Sophocles Mavroeidis, Steven Poelhekke, Simon Quinn, John Romalis, Brock Smith, Gerhard Toews, Rick van der Ploeg, Tony Venables, Pierre-Louis Vezina, Tim Willems, Justin Wolfers, and Dean Yang for their comments, though all errors are the authors’ own. Samuel Wills would like to thank the Economic and Social Research Council for financial support [grant number ES/K009303/1]. Corresponding email:
[email protected] 1 1 Introduction Geography has long been thought to play a role in economic growth, because some places enjoy natural advantages over others.