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The Effects of Aquatic Invasive Species on Property Values: Evidence from a Quasi-Experiment

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  • Eric J. Horsch
  • David J. Lewis

Abstract

This study uses hedonic analysis to estimate the effects of a common aquatic invasive species—Eurasian watermilfoil (milfoil)—on property values across an extensive system of over 170 lakes in the northern forest region of Wisconsin. Since milfoil is inadvertently spread by recreational boaters, and since boaters are more likely to visit attractive lakes, variables indicating the presence of milfoil are endogenous in a hedonic model. Using an identification strategy based on a spatial difference-in-differences specification, results indicate that lakes invaded with milfoil experienced an average 13% decrease in land values after invasion.

Suggested Citation

  • Eric J. Horsch & David J. Lewis, 2009. "The Effects of Aquatic Invasive Species on Property Values: Evidence from a Quasi-Experiment," Land Economics, University of Wisconsin Press, vol. 85(3), pages 391-409.
  • Handle: RePEc:uwp:landec:v:85:y:2009:i:3:p:391-409
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    References listed on IDEAS

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    Cited by:

    1. Kaiser, Brooks A. & Burnett, Kimberly M., 2010. "Spatial economic analysis of early detection and rapid response strategies for an invasive species," Resource and Energy Economics, Elsevier, pages 566-585.
    2. Tuttle, Carrie M. & Heintzelman, Martin D., 2015. "A loon on every lake: A hedonic analysis of lake water quality in the Adirondacks," Resource and Energy Economics, Elsevier, vol. 39(C), pages 1-15.
    3. repec:gam:jsusta:v:8:y:2016:i:1:p:44:d:61714 is not listed on IDEAS
    4. Dalmazzone, Silvana & Giaccaria, Sergio, 2014. "Economic drivers of biological invasions: A worldwide, bio-geographic analysis," Ecological Economics, Elsevier, vol. 105(C), pages 154-165.
    5. Felix Haifeng Liao & Frank M. Wilhelm & Mark Solomon, 2016. "The Effects of Ambient Water Quality and Eurasian Watermilfoil on Lakefront Property Values in the Coeur d’Alene Area of Northern Idaho, USA," Sustainability, MDPI, Open Access Journal, vol. 8(1), pages 1-12, January.
    6. Ay, Jean-Sauveur & Latruffe, Laure, 2013. "The Empirical Content of the Present Value Model: A survey of the instrumental uses of farmland prices," Working Papers 157112, Factor Markets, Centre for European Policy Studies.
    7. Mahesh, Ramachandran, 2015. "Validating Spatial Hedonic Modeling with a Behavioral Approach: Measuring the Impact of Water Quality Degradation on Coastal Housing Markets," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205664, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    8. repec:kap:enreec:v:68:y:2017:i:3:d:10.1007_s10640-016-0040-4 is not listed on IDEAS
    9. Edward B. Barbier & Mikołaj Czajkowski & Nick Hanley, 2017. "Is the Income Elasticity of the Willingness to Pay for Pollution Control Constant?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 663-682.
    10. Goodenberger, James & Klaiber, H. Allen, 2013. "Evading Invasives: How Eurasian Water-Milfoil Effects the Development of Lakefront Properties," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150309, Agricultural and Applied Economics Association.
    11. Zhang, Congwen & Boyle, Kevin J., 2010. "The effect of an aquatic invasive species (Eurasian watermilfoil) on lakefront property values," Ecological Economics, Elsevier, vol. 70(2), pages 394-404, December.
    12. Patrick J. Walsh & J. Walter Milon & David O. Scrogin, 2011. "The Spatial Extent of Water Quality Benefits in Urban Housing Markets," Land Economics, University of Wisconsin Press, pages 628-644.
    13. Melstrom, Richard T. & Lee, Kangil & Byl, Jacob P., 2016. "The effect of endangered species regulations on local employment: Evidence from the listing of the lesser prairie chicken," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 236254, Agricultural and Applied Economics Association.
    14. Adams, Damian C. & Bwenge, Anafrida N. & Lee, Donna J. & Larkin, Sherry L. & Alavalapati, Janaki R.R., 2011. "Public preferences for controlling upland invasive plants in state parks: Application of a choice model," Forest Policy and Economics, Elsevier, vol. 13(6), pages 465-472, July.
    15. Provencher, Bill & Lewis, David J. & Anderson, Kathryn, 2012. "Disentangling preferences and expectations in stated preference analysis with respondent uncertainty: The case of invasive species prevention," Journal of Environmental Economics and Management, Elsevier, vol. 64(2), pages 169-182.
    16. Dennis Guignet, 2013. "What Do Property Values Really Tell Us? A Hedonic Study of Underground Storage Tanks," Land Economics, University of Wisconsin Press, vol. 89(2), pages 211-226.
    17. Kent Kovacs & Thomas Holmes & Jeffrey Englin & Janice Alexander, 2011. "The Dynamic Response of Housing Values to a Forest Invasive Disease: Evidence from a Sudden Oak Death Infestation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 445-471.
    18. Goodenberger, James S. & Klaiber, H. Allen, 2016. "Evading invasives: How Eurasian watermilfoil affects the development of lake properties," Ecological Economics, Elsevier, vol. 127(C), pages 173-184.
    19. Lewis, David J. & Provencher, Bill & Beardmore, Ben, 2015. "Using an intervention framework to value salient ecosystem services in a stated preference experiment," Ecological Economics, Elsevier, vol. 114(C), pages 141-151.

    More about this item

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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