Schlesinger, 1998). This study compared the economic losses from perfectly anticipated and completely unanticipated sea-level rise scenarios ranging from 10 to 90 centimeters over the next 100 years. This example is particularly interesting because the capital stocks involved are long-lived compared to the average reproducible capital stock and coastal structures are among the most vulnerable and immobile capital stocks in our economy.
As would be expected, the results show that the high sea-level-rise scenarios show much higher damages (Table 5.1). Under perfect foresight, the property owner is assumed to optimize the depreciation schedule in light of the need for abandonment when sea-level-rise makes the structure uninhabitable (Table 5.1). Under the myopic case, the owner continues to operate and maintain the dwelling assuming no sea-level-rise until forced to abandon. The ratio of the myopic to the perfect-foresight case ranges from 1.02 for 2050 with slow sea-level-rise to 1.49 for 2100 and the rapid sea-level-rise case (Table 5.1). The interpretation is that, without adaptation, a sea-