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Property Value Impacts of Hemlock Woolly Adelgid in Residential Forests

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Abstract:

This study estimates the economic losses attributable to a nonindigenous forest insect, the hemlock woolly adelgid (Adelges tsuga), using cross-sectional and difference-in-difference hedonic price models. The data span a decade of residential property value transactions in West Milford, New Jersey. Hemlock health in naturally regenerated hemlock stands was measured biannually over this period using remote sensing data and the image differencing technique. These data were linked with spatially referenced land use and land cover data, measured twice during the decade, and the locations and housing characteristics associated with parcels sold. Spatial dependence in the regression models was addressed using spatial error and fixed-effects panel data models. The empirical results demonstrated that hemlock decline consistently caused statistically significant reductions in property values both for parcels containing hemlock resources as well as for neighboring nonhemlock parcels. We conclude that failure to account for spatial spillover effects would downwardly bias estimates of economic losses and total economic losses on properties sold during the study period ranged from $0.64 million in the parcel level cross-section model to $2.2 million in the 0.5-km neighborhood difference-in-difference model.

Keywords: hedonic analysis; invasive species; spatial econometrics

Document Type: Research Article

Publication date: 2010-12-01

More about this publication?
  • Forest Science is a peer-reviewed journal publishing fundamental and applied research that explores all aspects of natural and social sciences as they apply to the function and management of the forested ecosystems of the world. Topics include silviculture, forest management, biometrics, economics, entomology & pathology, fire & fuels management, forest ecology, genetics & tree improvement, geospatial technologies, harvesting & utilization, landscape ecology, operations research, forest policy, physiology, recreation, social sciences, soils & hydrology, and wildlife management.
    Forest Science is published bimonthly in February, April, June, August, October, and December.

    2015 Impact Factor: 1.702
    Ranking: 16 of 66 in forestry

    Also published by SAF:
    Journal of Forestry
    Other SAF Publications
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