# RECORD 35b0e34c43595f2139ae225aceb59ae4af4bb8da
# TITLE: Incentivizing the Public to Support Invasive Species Management: Eurasian Milfoil Reduces Lakefront Property Values
# YEAR: 2014.0  VENUE: PLoS ONE  DOI: 10.1371/journal.pone.0110458
# AUTHORS: J. Olden; M. Tamayo
# PAGES: 6  CANDIDATE TABLE PAGES (1-based): [4]
# ABSTRACT: Economic evaluations of invasive species are essential for providing comprehensive assessments of the benefits and costs of publicly-funded management activities, yet many previous investigations have focused narrowly on expenditures to control spread and infestation. We use hedonic modeling to evaluate the economic effects of Eurasian milfoil (Myriophyllum spicatum) invasions on lakefront property values of single-family homes in an urban-suburban landscape. Milfoil often forms dense canopies at the water surface, diminishing the value of ecosystem services (e.g., recreation, fishing) and necessitating expensive control and management efforts. We compare 1,258 lakeshore property sale transactions (1995–2006) in 17 lakes with milfoil and 24 un-invaded lakes in King County, Washington (USA). After accounting for structural (e.g., house size), locational (e.g., boat launch), and environmental characteristics (e.g., water clarity) of lakes, we found that milfoil has a significant negative effect on property sales price ($94,385 USD lower price), corresponding to a 19% decline in mean property values. The aggregate cost of milfoil invading one additional lake in the study area is, on average, $377,542 USD per year. Our study illustrates that invasive aquatic plants can significantly impact property values (and associated losses in property taxes that reduce local government revenue), justifying the need for management strategies that prevent and control invasions. We recommend coordinated efforts across Lake Management Districts to focus institutional support, funding, and outreach to prevent the introduction and spread of milfoil. This effort will limit opportunities for re-introduction from neighboring lakes and incentivize private landowners and natural resource agencies to commit time and funding to invasive species management.


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Incentivizing the Public to Support Invasive Species
Management: Eurasian Milfoil Reduces Lakefront
Property Values
Julian D. Olden1*, Mariana Tamayo2
1 School of Aquatic and Fishery Sciences, University of Washington, Seattle, Washington, United States of America, 2 Faculty of Life and Environmental Sciences, University
of Iceland, Reykjavı´k, Iceland
Abstract
Economic evaluations of invasive species are essential for providing comprehensive assessments of the benefits and costs of
publicly-funded management activities, yet many previous investigations have focused narrowly on expenditures to control
spread and infestation. We use hedonic modeling to evaluate the economic effects of Eurasian milfoil (Myriophyllum
spicatum) invasions on lakefront property values of single-family homes in an urban-suburban landscape. Milfoil often forms
dense canopies at the water surface, diminishing the value of ecosystem services (e.g., recreation, fishing) and necessitating
expensive control and management efforts. We compare 1,258 lakeshore property sale transactions (1995–2006) in 17 lakes
with milfoil and 24 un-invaded lakes in King County, Washington (USA). After accounting for structural (e.g., house size),
locational (e.g., boat launch), and environmental characteristics (e.g., water clarity) of lakes, we found that milfoil has a
significant negative effect on property sales price ($94,385 USD lower price), corresponding to a 19% decline in mean
property values. The aggregate cost of milfoil invading one additional lake in the study area is, on average, $377,542 USD
per year. Our study illustrates that invasive aquatic plants can significantly impact property values (and associated losses in
property taxes that reduce local government revenue), justifying the need for management strategies that prevent and
control invasions. We recommend coordinated efforts across Lake Management Districts to focus institutional support,
funding, and outreach to prevent the introduction and spread of milfoil. This effort will limit opportunities for re-
introduction from neighboring lakes and incentivize private landowners and natural resource agencies to commit time and
funding to invasive species management.
Citation: Olden JD, Tamayo M (2014) Incentivizing the Public to Support Invasive Species Management: Eurasian Milfoil Reduces Lakefront Property Values. PLoS
ONE 9(10): e110458. doi:10.1371/journal.pone.0110458
Editor: Bo Li, Fudan University, China
Received March 18, 2014; Accepted September 9, 2014; Published October 15, 2014
Copyright:  2014 Olden, Tamayo. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits
unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
Data Availability: The authors confirm that all data underlying the findings are fully available without restriction. Data is available at http://dx.doi.org/10.6084/
m9.figshare.1148967.
Funding: This work was supported by the Washington Department of Ecology Aquatic Weeds Management Program, University of Washington Royalty Research
Fund, and the University of Washington - School of Aquatic and Fishery Sciences H. Mason Keeler Endowed Professorship. The funders had no role in study
design, data collection and analysis, decision to publish, or preparation of the manuscript.
Competing Interests: The authors have declared that no competing interests exist.
* Email: olden@uw.edu
Introduction
Despite the long history of investigating the ecology of
nonindigenous species [1], the scope of economic damages
associated with species invasions has only recently received greater
attention [2,3]. Continental scale estimates suggest that thousands
of invasive plants and animals have generated billions of dollars in
economic losses [4–6]. These estimates, however, are conservative
because they focus predominantly on expenditures to control the
infestation and spread of invasive species. From an economic
perspective, the full cost of biological invasions also includes the
effects on host ecosystems and the human populations dependent
on them [7]. The societal value that individuals give to both
market (e.g., forestry) and nonmarket (e.g., landscape aesthetics)
goods and services is also important to the economic valuation of
damages incurred by invasive species. These values consider the
market price of goods and services and people’s willingness to pay
and sell them [8–10].
In freshwater environments, previous studies have largely
focused on the economic impacts of invasive species on fisheries,
power plants, water treatment facilities, and recreation [11,12].
For example, the invasion of the rusty crayfish (Orconectes rusticus)
into lakes in northern Wisconsin (USA) is estimated to generate
damages of about $1.5 million USD annually to the panfish
recreational fishery [13], and zebra mussels (Dreissena polymorpha)
cost an estimated $267 million USD in lost power generation and
drinking water treatment facilities in Lake St. Clair (USA) during
the first 15 years of infestation [14]. However, a more complete
understanding of the full spectrum of economic effects associated
with aquatic invasive plants is needed to develop comprehensive
policies and management strategies, as well as to incentivize the
public to prevent future spread.
Eurasian milfoil (Myriophyllum spicatum L., herein referred to
milfoil) is an ideal study organism to enhance our knowledge
regarding the economic effects of aquatic invasive species because
extensive information is available on the ecology and management
of this invasive plant [15]. Native to Europe, Asia, and northern
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this effect is unlikely to be manifested our property market where
.90% of the study lakes had water clarity .2 m, with an average
of 3.4 m and little variability (SD = 0.19 m). Given this, differences
in water clarity are likely imperceptible to potential property
buyers. Lake area and water temperature were also very similar
among our lakes given their similar glacial history and elevation.
Taken together, our housing market is characterized by similar
sized lakes with good water clarity and similar water temperatures;
therefore, it is unlikely that these attributes significantly affected a
homeowner’s willingness to pay.
A series of regression models were developed and compared
using the modified Akaike’s Information Criterion for small
samples (AICc). AICc is a model selection technique based on the
trade-off between model accuracy and parsimony [40]. Akaike
weights were calculated with the AICc values to determine the
relative likelihood that each model is the best model given the data
and the other candidate models. Statistical analyses where
conducted using PASW 18 (IBM SPSS).
We estimated the aggregate cost of milfoil invading one
additional small lake in our study area by discounting a
homeowner’s willingness to pay for a property on a lake free of
milfoil by 5% (same rate as in [25]) to estimate the average annual
marginal willingness to pay, and then multiplying this annual
average with the mean number of parcels for our study lakes
(n = 80 parcels).
Results
The presence of Eurasian milfoil had a significant negative
effect on property values; mean reduction in property values was
$94,385 USD, ranging from 2$92,558 to 2$94,670 USD
according to the top three competitive models (Table 2). Based
on an average sale price of $502,313 across all study lakes, the
negative effect of milfoil presence corresponds to a 19% decline in
mean property values.
The hedonic analysis revealed that larger homes located on
lakes with larger surface areas had a significant positive effect on
property values, on average selling for $2,600 per m2 and $209,400
per km2 more, respectively (Table 2). Parcel density showed a
negligible
effect
on
property
value,
whereas
water
clarity
negatively influenced property sales prices, though not statistically
significant. All model parameters, except for water clarity and
parcel density, reflected the anticipated directional effect on
property value (Table 1).
A homeowner’s marginal willingness to pay for a waterfront
property on a lake free of milfoil was on average $94,385 (model 1
in Table 2), resulting in an average annual marginal willingness to
pay of $4,719 (using a 5% discount rate). The aggregate cost of
milfoil invading one additional study lake was $377,542 per year
($4,719680 lakefront parcels).
Discussion
A broader understanding of the economic impacts of aquatic
invasive plants is essential for promoting changes in policy and
engaging more diverse stakeholder participation, such as lakefront
property owners and recreational boaters, in the management of
natural resources. Only until the full cost of biological invasions is
considered (i.e. beyond control expenditures), will the optimal
economical management of invasive species be possible [41]. Our
study demonstrates that aquatic invasive plants can have dramatic
economic impacts on the sale value of lakefront properties. The
presence of milfoil in a lake results in an ‘‘invisible tax’’ on the real
estate market by substantially reducing property values an average
Table 2. Hedonic analysis results for the two-stage least squares regression model predicting property price as a function of key independent variables describing structure,
location, and the environment (see Table 1).
Model 1
Model 2
Model 3
Variable
Coefficient
Sig.
S.E.
Coefficient
Sig.
S.E.
Coefficient
Sig.
S.E.
Constant
263891.9
97303.1
229052.8
117533.5
295790.7
149910.1
Milfoil presence
294385.4
**
46712.9
294670.0
*
49174.7
292558.0
*
48255.6
House size
2608.1
***
344.2
2474.0
***
703.9
2681.6
***
726.0
Lot size
21.2
13.2
3.1
12.9
Parcel density
102.8
70.3
115.4
78.6
Lake area
209407.8
**
81848.0
154409.5
*
74073.6
215595.0
**
84521.5
Water clarity
27430.3
11160.2
26962.7
12820.2
26954.9
12600.7
AICc
23.931
23.986
23.998
Relative likelihood
1.000
0.969
0.963
See text for discussion of the endogenous variable (milfoil presence) and instrumental variables. Reported are the top three candidate models according to Akaike’s Information Criterion for small samples (AICc) with their
associated parameter coefficients and standard errors. The relative likelihood that the model is the best model given the data is denoted.
Significant levels: *P,0.10, **P,0.05, ***P,0.01.
doi:10.1371/journal.pone.0110458.t002
Eurasian Milfoil Reduces Lakefront Property Values
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of over $94 thousand USD, translating to 19% decline in value.
We note that our estimates did not consider the level of infestation,
the implementation of management actions, nor the losses to
recreation.
Similar economic damages have been reported in northern
Wisconsin, where waterfront property values in a popular
recreational and rural area declined by approximately 8% after
milfoil invaded a lake [25]. Furthermore, the process of milfoil
infestation in five Vermont lakes (USA) resulted in property values
that decreased by ,1% to 16% depending on the level of
infestation [26]. Both these studies examined rural properties
containing mostly vacation homes (secondary residences) located
in forested landscapes; our study adds to this understanding by
demonstrating economic impacts to property values of primary
residences in urban settings. Taken together, the negative effect of
milfoil on property values of primary and secondary homes in
different
regions
and
landscape
settings,
suggests
that
the
economic impacts of aquatic invasive plants are widespread and
may be greater in urbanized landscapes. We recognize that milfoil
presence/absence may overestimate economic impacts compared
to plant density [26]. Additional studies that include detailed
estimates of milfoil infestation (abundance) at the time of purchase,
distance of property to nearest milfoil colony, and the level of
property buyer knowledge of milfoil are warranted [34]. By
contrast, the economic impacts of milfoil may be undervalued if
those properties on highly infested lakes are the most difficult to
sell and therefore remain on the market.
The costs of preventing new invasions of aquatic weeds are
often thought to be greater than the benefits, thus leading to
inaction. Our study, however, indicates there are benefits to
preventing the spread of milfoil given that the invasion of one
additional study lake leads to a high aggregate cost of over $375
thousand USD annually. This aggregate cost represents a third of
the amount spent annually ($1 million USD) on managing milfoil
across Washington State [42]. The knowledge that an invasion of
milfoil can lead to a significant decline in property values provides
the public an economic incentive to invest in prevention and/or
control strategies [43]. Moreover, reductions in property values
also translate directly to substantially losses in property taxes
garnered by local governments. Thus the economic impacts of
milfoil invasions may extend well beyond the infested lakefront
properties by reducing local government revenue.
Lakefront property owners stand to benefit greatly (higher
property values) from preventing milfoil invading their lake. In
addition, it is necessary to engage recreational boaters in
prevention efforts as well regardless whether or not they live on
a lake, because they are an important dispersal vector of milfoil
and other aquatic invasive species [18,19,44]. When recreational
boaters spread milfoil into a new lake they are inadvertently
creating hidden costs (negative externalities) to other lake users of
the newly invaded lake; these costs include lower property values,
reduction of biodiversity, and diminished recreational experience,
among others.
Property owners could also benefit from aquatic weed control.
Zhang and Boyle [26] showed that control efforts on a heavily
infested lake that reduced milfoil areal coverage from 81–100% to
61–80% could offset losses to property values caused by the
invasion. Similarly, we expect that properties on lakes where
milfoil densities have been reduced will likely experience a reduced
negative price effect. We did not consider milfoil management
effects in our analysis because it requires a treatment to have taken
place before the property transaction but within the same year. If
the treatment were to take place after the transaction, the
associated benefit to a selling property would not yet be capitalized
into property price; ignoring expectations or knowledge of a
pending treatment.
A key component for long-term management of invasive species
is the participation of multiple groups representing ecological and
socio-economic perspectives [45,46]. Often, however, engaging
stakeholder groups is difficult because each entity may have
different attitudes towards invasive species and resource allocation
[47,48]. For example, a study of stakeholder perceptions about
invasive
species
in
the
Don˜ana
wetland
(Spain),
revealed
remarkably different viewpoints among parties, which included
local users, tourists, and conservation professionals [49]. People
were more willing to support and pay for management of invasive
species (including eradication) when they had a higher level of
education, and a better understanding of the study. Therefore, to
successfully manage Eurasian milfoil and other invasive species it is
important to embrace the diversity of perceptions held by the
stakeholders, by employing strategies (e.g., involving stakeholders
at the beginning of the decision-making process) that promote
cooperative participation and communication among parties
[46,49].
Economic research on invasive species is essential for compre-
hensive assessments of the benefits and costs of management
strategies aimed at increasing the effectiveness of publicly funded
programs [50,51]. Prevention of future introductions and control
of existing invasions are powerful management options [52],
however, the ecological and economic benefits of these actions
must be better illustrated. Individual costs of milfoil invasions (this
study; [25,26]) coupled with local, regional and national costs
associated with lost recreation, agriculture and power generation
(e.g., [23]) make for a compelling case that even modest
expenditures on prevention could help avoid substantial economic
impacts and help preserve freshwater ecosystems. Public-derived
funding for aquatic weed management in the United States is
generally provided through state-derived sources and the creation
of Lake Management Districts that allow lake property owners to
tax themselves and other lake users to collect funds for various
prevention and control activities. Only three of our study lakes
were represented by a Lake Management District at the time of
our analysis. We recommend coordinated efforts across the
management mosaic (sensu [41]), whereby networks of Lake
Management Districts operate together to focus institutional
support, funding, and outreach to prevent the introduction and
spread of milfoil. This effort will limit opportunities for re-
introduction from neighboring lakes and incentivize homeowners
to commit time and funding to invasive species management,
including the education of transient boaters.
Acknowledgments
We are very grateful to D. Kristo´fersson and C. Anderson for sharing their
expertise in econometric valuation and Sudeep Chandra and Mark Sytsma
for their constructive comments on the paper. We thank the King County’s
Department of Assessments, GIS Center, and Lake Stewardship Program,
as well as the Washington Department of Ecology for providing the data
for the study. We appreciate the assistance of S. Abella, M. Bell-
McKinnon, B. Davı´ sdo´ttir, H. Darin, M. Jenkins, J. Jo´hannsson, K.
Hamel, E. Larson, K. Messick, J. Ramos, S. Roe, and J. Withey.
Author Contributions
Conceived and designed the experiments: JDO. Performed the experi-
ments: JDO MT. Analyzed the data: MT. Contributed reagents/
materials/analysis tools: MT JDO. Contributed to the writing of the
manuscript: JDO MT.
Eurasian Milfoil Reduces Lakefront Property Values
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