1# RECORD 35b0e34c43595f2139ae225aceb59ae4af4bb8da2# TITLE: Incentivizing the Public to Support Invasive Species Management: Eurasian Milfoil Reduces Lakefront Property Values3# YEAR: 2014.0 VENUE: PLoS ONE DOI: 10.1371/journal.pone.01104584# AUTHORS: J. Olden; M. Tamayo5# PAGES: 6 CANDIDATE TABLE PAGES (1-based): [4]6# 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.789===== PAGE 1 (score 12, numeric-paren 0, table-words 0, var-words 12) =====1011Incentivizing the Public to Support Invasive Species12Management: Eurasian Milfoil Reduces Lakefront13Property Values14Julian D. Olden1*, Mariana Tamayo2151 School of Aquatic and Fishery Sciences, University of Washington, Seattle, Washington, United States of America, 2 Faculty of Life and Environmental Sciences, University16of Iceland, Reykjavı´k, Iceland17Abstract18Economic evaluations of invasive species are essential for providing comprehensive assessments of the benefits and costs of19publicly-funded management activities, yet many previous investigations have focused narrowly on expenditures to control20spread and infestation. We use hedonic modeling to evaluate the economic effects of Eurasian milfoil (Myriophyllum21spicatum) invasions on lakefront property values of single-family homes in an urban-suburban landscape. Milfoil often forms22dense canopies at the water surface, diminishing the value of ecosystem services (e.g., recreation, fishing) and necessitating23expensive control and management efforts. We compare 1,258 lakeshore property sale transactions (1995–2006) in 17 lakes24with milfoil and 24 un-invaded lakes in King County, Washington (USA). After accounting for structural (e.g., house size),25locational (e.g., boat launch), and environmental characteristics (e.g., water clarity) of lakes, we found that milfoil has a26significant negative effect on property sales price ($94,385 USD lower price), corresponding to a 19% decline in mean27property values. The aggregate cost of milfoil invading one additional lake in the study area is, on average, $377,542 USD28per year. Our study illustrates that invasive aquatic plants can significantly impact property values (and associated losses in29property taxes that reduce local government revenue), justifying the need for management strategies that prevent and30control invasions. We recommend coordinated efforts across Lake Management Districts to focus institutional support,31funding, and outreach to prevent the introduction and spread of milfoil. This effort will limit opportunities for re-32introduction from neighboring lakes and incentivize private landowners and natural resource agencies to commit time and33funding to invasive species management.34Citation: Olden JD, Tamayo M (2014) Incentivizing the Public to Support Invasive Species Management: Eurasian Milfoil Reduces Lakefront Property Values. PLoS35ONE 9(10): e110458. doi:10.1371/journal.pone.011045836Editor: Bo Li, Fudan University, China37Received March 18, 2014; Accepted September 9, 2014; Published October 15, 201438Copyright: 2014 Olden, Tamayo. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits39unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.40Data Availability: The authors confirm that all data underlying the findings are fully available without restriction. Data is available at http://dx.doi.org/10.6084/41m9.figshare.1148967.42Funding: This work was supported by the Washington Department of Ecology Aquatic Weeds Management Program, University of Washington Royalty Research43Fund, and the University of Washington - School of Aquatic and Fishery Sciences H. Mason Keeler Endowed Professorship. The funders had no role in study44design, data collection and analysis, decision to publish, or preparation of the manuscript.45Competing Interests: The authors have declared that no competing interests exist.46* Email: olden@uw.edu47Introduction48Despite the long history of investigating the ecology of49nonindigenous species [1], the scope of economic damages50associated with species invasions has only recently received greater51attention [2,3]. Continental scale estimates suggest that thousands52of invasive plants and animals have generated billions of dollars in53economic losses [4–6]. These estimates, however, are conservative54because they focus predominantly on expenditures to control the55infestation and spread of invasive species. From an economic56perspective, the full cost of biological invasions also includes the57effects on host ecosystems and the human populations dependent58on them [7]. The societal value that individuals give to both59market (e.g., forestry) and nonmarket (e.g., landscape aesthetics)60goods and services is also important to the economic valuation of61damages incurred by invasive species. These values consider the62market price of goods and services and people’s willingness to pay63and sell them [8–10].64In freshwater environments, previous studies have largely65focused on the economic impacts of invasive species on fisheries,66power plants, water treatment facilities, and recreation [11,12].67For example, the invasion of the rusty crayfish (Orconectes rusticus)68into lakes in northern Wisconsin (USA) is estimated to generate69damages of about $1.5 million USD annually to the panfish70recreational fishery [13], and zebra mussels (Dreissena polymorpha)71cost an estimated $267 million USD in lost power generation and72drinking water treatment facilities in Lake St. Clair (USA) during73the first 15 years of infestation [14]. However, a more complete74understanding of the full spectrum of economic effects associated75with aquatic invasive plants is needed to develop comprehensive76policies and management strategies, as well as to incentivize the77public to prevent future spread.78Eurasian milfoil (Myriophyllum spicatum L., herein referred to79milfoil) is an ideal study organism to enhance our knowledge80regarding the economic effects of aquatic invasive species because81extensive information is available on the ecology and management82of this invasive plant [15]. Native to Europe, Asia, and northern83PLOS ONE | www.plosone.org84185October 2014 | Volume 9 | Issue 10 | e110458868788===== PAGE 4 (score 41, numeric-paren 9, table-words 9, var-words 13) =====8990this effect is unlikely to be manifested our property market where91.90% of the study lakes had water clarity .2 m, with an average92of 3.4 m and little variability (SD = 0.19 m). Given this, differences93in water clarity are likely imperceptible to potential property94buyers. Lake area and water temperature were also very similar95among our lakes given their similar glacial history and elevation.96Taken together, our housing market is characterized by similar97sized lakes with good water clarity and similar water temperatures;98therefore, it is unlikely that these attributes significantly affected a99homeowner’s willingness to pay.100A series of regression models were developed and compared101using the modified Akaike’s Information Criterion for small102samples (AICc). AICc is a model selection technique based on the103trade-off between model accuracy and parsimony [40]. Akaike104weights were calculated with the AICc values to determine the105relative likelihood that each model is the best model given the data106and the other candidate models. Statistical analyses where107conducted using PASW 18 (IBM SPSS).108We estimated the aggregate cost of milfoil invading one109additional small lake in our study area by discounting a110homeowner’s willingness to pay for a property on a lake free of111milfoil by 5% (same rate as in [25]) to estimate the average annual112marginal willingness to pay, and then multiplying this annual113average with the mean number of parcels for our study lakes114(n = 80 parcels).115Results116The presence of Eurasian milfoil had a significant negative117effect on property values; mean reduction in property values was118$94,385 USD, ranging from 2$92,558 to 2$94,670 USD119according to the top three competitive models (Table 2). Based120on an average sale price of $502,313 across all study lakes, the121negative effect of milfoil presence corresponds to a 19% decline in122mean property values.123The hedonic analysis revealed that larger homes located on124lakes with larger surface areas had a significant positive effect on125property values, on average selling for $2,600 per m2 and $209,400126per km2 more, respectively (Table 2). Parcel density showed a127negligible128effect129on130property131value,132whereas133water134clarity135negatively influenced property sales prices, though not statistically136significant. All model parameters, except for water clarity and137parcel density, reflected the anticipated directional effect on138property value (Table 1).139A homeowner’s marginal willingness to pay for a waterfront140property on a lake free of milfoil was on average $94,385 (model 1141in Table 2), resulting in an average annual marginal willingness to142pay of $4,719 (using a 5% discount rate). The aggregate cost of143milfoil invading one additional study lake was $377,542 per year144($4,719680 lakefront parcels).145Discussion146A broader understanding of the economic impacts of aquatic147invasive plants is essential for promoting changes in policy and148engaging more diverse stakeholder participation, such as lakefront149property owners and recreational boaters, in the management of150natural resources. Only until the full cost of biological invasions is151considered (i.e. beyond control expenditures), will the optimal152economical management of invasive species be possible [41]. Our153study demonstrates that aquatic invasive plants can have dramatic154economic impacts on the sale value of lakefront properties. The155presence of milfoil in a lake results in an ‘‘invisible tax’’ on the real156estate market by substantially reducing property values an average157Table 2. Hedonic analysis results for the two-stage least squares regression model predicting property price as a function of key independent variables describing structure,158location, and the environment (see Table 1).159Model 1160Model 2161Model 3162Variable163Coefficient164Sig.165S.E.166Coefficient167Sig.168S.E.169Coefficient170Sig.171S.E.172Constant173263891.917497303.1175229052.8176117533.5177295790.7178149910.1179Milfoil presence180294385.4181**18246712.9183294670.0184*18549174.7186292558.0187*18848255.6189House size1902608.1191***192344.21932474.0194***195703.91962681.6197***198726.0199Lot size20021.220113.22023.120312.9204Parcel density205102.820670.3207115.420878.6209Lake area210209407.8211**21281848.0213154409.5214*21574073.6216215595.0217**21884521.5219Water clarity22027430.322111160.222226962.722312820.222426954.922512600.7226AICc22723.93122823.98622923.998230Relative likelihood2311.0002320.9692330.963234See 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 their235associated parameter coefficients and standard errors. The relative likelihood that the model is the best model given the data is denoted.236Significant levels: *P,0.10, **P,0.05, ***P,0.01.237doi:10.1371/journal.pone.0110458.t002238Eurasian Milfoil Reduces Lakefront Property Values239PLOS ONE | www.plosone.org2404241October 2014 | Volume 9 | Issue 10 | e110458242243244===== PAGE 5 (score 13, numeric-paren 0, table-words 0, var-words 13) =====245246of over $94 thousand USD, translating to 19% decline in value.247We note that our estimates did not consider the level of infestation,248the implementation of management actions, nor the losses to249recreation.250Similar economic damages have been reported in northern251Wisconsin, where waterfront property values in a popular252recreational and rural area declined by approximately 8% after253milfoil invaded a lake [25]. Furthermore, the process of milfoil254infestation in five Vermont lakes (USA) resulted in property values255that decreased by ,1% to 16% depending on the level of256infestation [26]. Both these studies examined rural properties257containing mostly vacation homes (secondary residences) located258in forested landscapes; our study adds to this understanding by259demonstrating economic impacts to property values of primary260residences in urban settings. Taken together, the negative effect of261milfoil on property values of primary and secondary homes in262different263regions264and265landscape266settings,267suggests268that269the270economic impacts of aquatic invasive plants are widespread and271may be greater in urbanized landscapes. We recognize that milfoil272presence/absence may overestimate economic impacts compared273to plant density [26]. Additional studies that include detailed274estimates of milfoil infestation (abundance) at the time of purchase,275distance of property to nearest milfoil colony, and the level of276property buyer knowledge of milfoil are warranted [34]. By277contrast, the economic impacts of milfoil may be undervalued if278those properties on highly infested lakes are the most difficult to279sell and therefore remain on the market.280The costs of preventing new invasions of aquatic weeds are281often thought to be greater than the benefits, thus leading to282inaction. Our study, however, indicates there are benefits to283preventing the spread of milfoil given that the invasion of one284additional study lake leads to a high aggregate cost of over $375285thousand USD annually. This aggregate cost represents a third of286the amount spent annually ($1 million USD) on managing milfoil287across Washington State [42]. The knowledge that an invasion of288milfoil can lead to a significant decline in property values provides289the public an economic incentive to invest in prevention and/or290control strategies [43]. Moreover, reductions in property values291also translate directly to substantially losses in property taxes292garnered by local governments. Thus the economic impacts of293milfoil invasions may extend well beyond the infested lakefront294properties by reducing local government revenue.295Lakefront property owners stand to benefit greatly (higher296property values) from preventing milfoil invading their lake. In297addition, it is necessary to engage recreational boaters in298prevention efforts as well regardless whether or not they live on299a lake, because they are an important dispersal vector of milfoil300and other aquatic invasive species [18,19,44]. When recreational301boaters spread milfoil into a new lake they are inadvertently302creating hidden costs (negative externalities) to other lake users of303the newly invaded lake; these costs include lower property values,304reduction of biodiversity, and diminished recreational experience,305among others.306Property owners could also benefit from aquatic weed control.307Zhang and Boyle [26] showed that control efforts on a heavily308infested lake that reduced milfoil areal coverage from 81–100% to30961–80% could offset losses to property values caused by the310invasion. Similarly, we expect that properties on lakes where311milfoil densities have been reduced will likely experience a reduced312negative price effect. We did not consider milfoil management313effects in our analysis because it requires a treatment to have taken314place before the property transaction but within the same year. If315the treatment were to take place after the transaction, the316associated benefit to a selling property would not yet be capitalized317into property price; ignoring expectations or knowledge of a318pending treatment.319A key component for long-term management of invasive species320is the participation of multiple groups representing ecological and321socio-economic perspectives [45,46]. Often, however, engaging322stakeholder groups is difficult because each entity may have323different attitudes towards invasive species and resource allocation324[47,48]. For example, a study of stakeholder perceptions about325invasive326species327in328the329Don˜ana330wetland331(Spain),332revealed333remarkably different viewpoints among parties, which included334local users, tourists, and conservation professionals [49]. People335were more willing to support and pay for management of invasive336species (including eradication) when they had a higher level of337education, and a better understanding of the study. Therefore, to338successfully manage Eurasian milfoil and other invasive species it is339important to embrace the diversity of perceptions held by the340stakeholders, by employing strategies (e.g., involving stakeholders341at the beginning of the decision-making process) that promote342cooperative participation and communication among parties343[46,49].344Economic research on invasive species is essential for compre-345hensive assessments of the benefits and costs of management346strategies aimed at increasing the effectiveness of publicly funded347programs [50,51]. Prevention of future introductions and control348of existing invasions are powerful management options [52],349however, the ecological and economic benefits of these actions350must be better illustrated. Individual costs of milfoil invasions (this351study; [25,26]) coupled with local, regional and national costs352associated with lost recreation, agriculture and power generation353(e.g., [23]) make for a compelling case that even modest354expenditures on prevention could help avoid substantial economic355impacts and help preserve freshwater ecosystems. Public-derived356funding for aquatic weed management in the United States is357generally provided through state-derived sources and the creation358of Lake Management Districts that allow lake property owners to359tax themselves and other lake users to collect funds for various360prevention and control activities. Only three of our study lakes361were represented by a Lake Management District at the time of362our analysis. We recommend coordinated efforts across the363management mosaic (sensu [41]), whereby networks of Lake364Management Districts operate together to focus institutional365support, funding, and outreach to prevent the introduction and366spread of milfoil. This effort will limit opportunities for re-367introduction from neighboring lakes and incentivize homeowners368to commit time and funding to invasive species management,369including the education of transient boaters.370Acknowledgments371We are very grateful to D. Kristo´fersson and C. Anderson for sharing their372expertise in econometric valuation and Sudeep Chandra and Mark Sytsma373for their constructive comments on the paper. We thank the King County’s374Department of Assessments, GIS Center, and Lake Stewardship Program,375as well as the Washington Department of Ecology for providing the data376for the study. We appreciate the assistance of S. Abella, M. Bell-377McKinnon, B. Davı´ sdo´ttir, H. Darin, M. Jenkins, J. Jo´hannsson, K.378Hamel, E. Larson, K. Messick, J. Ramos, S. Roe, and J. Withey.379Author Contributions380Conceived and designed the experiments: JDO. Performed the experi-381ments: JDO MT. Analyzed the data: MT. Contributed reagents/382materials/analysis tools: MT JDO. Contributed to the writing of the383manuscript: JDO MT.384Eurasian Milfoil Reduces Lakefront Property Values385PLOS ONE | www.plosone.org3865387October 2014 | Volume 9 | Issue 10 | e110458388