From coast to cost: Mispricing and reform scenarios in Italy’s coastal concession system

Many governments allocate access to high-rent natural resources through long-term concessions rather than competitive auctions. In Italy, coastal concessions for beach tourism have historically been renewed administratively, in tension with the EU Services (“Bolkestein”) Directive and recent European Court of Justice rulings. We provide an empirical assessment of this system, focusing on how concession fees relate to firms’ performance and local market conditions. We combine administrative data on maritime concessions with balance-sheet information from AIDA at the province and municipality levels, and exploit firm-level identifiers for the Campania region. First, we document strong spatial disparities: fees co-move with revenues but are weakly related to profits, while labor input is the main operational driver. Second, using a Pareto-based framework, we show that the nationally administered fee grid implies substantial under-pricing in high-inequality areas. Third, we construct firm-level valuation proxies in Campania using machine learning and use them to simulate exploratory auction scenarios. The results show that auction-based mechanisms can raise payments among allocated concessions, but aggregate fiscal gains depend critically on reserve prices, competition intensity, and fallback rules for non-allocated lots.