The hedonic prices could be used to calculate the change in
welfare, if a dike were to be built on 1 km of open coast. Unfortunately,
data on the profits in the accommodation sector7 as
well as a demand function for overnight stays at the coast are
not available. In order to get an idea of the impact that adaptation
measures would have, the extreme case of perfectly
inelastic supply of accommodation is examined. In the short run, the supply of accommodation may indeed be inelastic. In
the case of perfectly inelastic supply, the consumer surplus
will not change, when demand shifts; however, the producer
surplus will change by an amount equal to the change in price
multiplied by the number of overnight stays.