ESTIMATING THE TOTAL VALUE OF FOREST QUALITY 

IN HIGH-ELEVATION SPRUCE-FIR FORESTS 

Michelle Haefele, Randall A. Kramer, and Thomas Holmes* 

ABSTRACT 

The protection of forest resources is cu"ently one of the 

most important policy issues in the U.S:I'his paper 

reports the results of a study to determine the nonmarket 

benefits of protecting forest quality in the southern 

Appalachian Mountains.The contingent valuation 

method is used to estimate the total value of forest 

quality. Two willingness to pay question formats 

(discrete choice and payment card) are compared; results 

indicate that there is a significant difference between 

them. Other results are: 1) there is substantial 

willingness to pay to protect forest quality; and 2) most 

forest protection benefits refleatonuse values. 

INTRODUCTION 

One of the most highly visible items on the natural 

resource policy agenda in the United States is the 

management and protection of forest resources. Much 

of the public debate concerns the management of old 

growth forests in Alaska and the Pacific Northwest, as 

well as the role of the U.S. in affecting the use of 

primary forests in the tropics. In addition to 

controversy about balancing the use of forests for 

timber and nontimber production, many are concerned 

about damages to forest resources. While the recent 

National Acidic Precipitation Assessment Program 

(NAPAP) report (Barnard et al., 1989) was 

inconclusive, many scientists are convinced that ozone, 

acid precipitation, and other pollutants are damaging 

forest resources in parts of the United States (de 

Steiguer et al. 1990). Furthermore, periodic outbreaks 

of pests, such as the gypsy moth in the Northeast, have 

significant impacts on the publics perception of forest 

quality. 

One important forest ecosystem undergoing rapid 

change due to environmental conditions is the sprucefir ecosystem in the Appalachian Mountains, which is 

located primarily on public lands. Preventing or 

reversing excessive forest mortality can be expected to 

have significant costs. Although spruce-fir forests in 

the Appalachians currently provide little in the way of 

commercial or market commodities, they provide 

significant nonmarket values including recreation, 

scenic beauty, and biodiversity protection. Therefore, 

economic analysis which takes into account both 

market and nonmarket values is required to facilitate 

informed investment decision-making about publicly 

owned forests (Kramer et al., 1990). 

This study evaluates public preferences toward efforts 

to reduce further decline in forest quality in the 

southern half of the Appalachian Mountains. More 

specifically, the purposes of this study are: 1) to 

measure changes in recreational and nonuse values 

which may result from protecting forest quality from 

further deterioration; and 2) to assess the available 

evaluation methods and recommend refinements for 

improved measurement of forest quality benefits. 

SPRUCE-FIR FORESTS 

The spruce-fir forest type in the southern Appalachian 

Mountains occurs as a series of island-like stands, 

occupying the highest peaks (between 4,400 and 6,684 

feet) in North Carolina, Tennessee, and Virginia. The 

major tree species in these forests are red spruce 

(Picea rubens) and Fraser fir (Abies fraseri). The 

spruce-fir ecosystem includes a number of endemic and 

rare plants and animals. A marked increase in 

mortality in the spruce-fir forests of the southern 

Appalachian Mountains has been observed in recent 

years. Twenty-five percent of the spruce-fir area is 

classified as having severe mortality (that is, greater 

than 70 percent of the standing trees dead) (Dull, et 

al., 1988). 

• Michelle Haefele is a graduate student at Colorado State University, Fort Collins, CO; in May 1991 she was 

a graduate research assistant at Duke University, Durham, North Carolina. Randall Kramer is an Associate 

Professor, Center for Resource and Environmental Policy, Duke University, Durham, North Carolina. Thomas 

Holmes is a Research Forester, Southeastern Forest Experiment Station, Research Triangle Park, North Carolina. 

The authors appreciate comments from Evan Mercer and Dixie Reeves on earlier drafts. 

91 

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Although the spruce-fir forests were important tourist 

locations as early as the mid 1800s, much of the high 

elevation forests remained virtually inaccessible until 

they began to be logged around the tum of the century 

(Pyle and Schafale, 1988). Timber harvesting 

continued until approximately 1925. Disturbance from 

logging and associated wildfires has reduced these 

forests to ten percent of their original area (Dull et al., 

1988). The establishment of the Great Smoky 

Mountains National Park in 1934 ended the logging 

and fires and preserved a large part of the forest areas. 

The pattern of logging and burning is the ftrst of three 

major human-induced disturbances which have altered 

the ecology of the spruce-fir forests (Richter et al., 

1989). 

The second wave of human-induced forest disturbance 

is associated with an infestation of the balsam woolly 

adelgid introduced accidently from Europe about 1900. 

Initially introduced in the Northeast, this pest was first 

detected in the southern Appalachians in 1957. The 

balsam woolly adelgid attacks only the mature Fraser 

flr. A survey of Fraser fir regeneration at Mt. 

Mitchell, North Carolina, conducted over the period 

1966 to 1978 indicates that the species seems to be able 

to produce viable seeds before severe infestation; 

therefore, Fraser flr will probably remain in the 

southern Appalachians (Witter and Ragenovich, 1986). 

Red spruce are resistant to the insect, but can be 

indirectly affected by fir mortality as they are shallowrooted and may need the buffering of the ftr trees to 

prevent blowdown. 

Air pollution is believed to be the cause of the third 

wave of anthropogenic forest disturbance. Air 

pollution injury is suspected of reducing the resistance 

of Fraser fir to the balsam woolly adelgid infestation 

(Gamer et al., 1989). Acidic precipitation is also 

suspected of contributing to the decline of the sprucefir forests, by altering the resistance of red spruce to 

winter injury (Barnard et al., 1989) and by reducing red 

spruce growth rates (Chappelka et al., 1985). All of 

the high elevation forests in the eastern United States 

are exposed to potentially harmful levels of ozone and 

cloud water acidity. The long-term effects of this 

exposure are as yet unknown (Barnard et al., 1989). 

METHODS 

This study uses the contingent valuation (CV) method 

to estimate both use and nonuse values of the sprucefrr forest ecosystem. The contingent valuation method 

uses simulated markets to determine willingness to pay 

for environmental amenities and other public goods. 

Although widely applied to the study of nonmarket 

goods, the contingent valuation method has received 

92 

relatively little attention as a means of estimating 

damage to forests. Exceptions include two studies of 

air pollution damage to southern California forests by 

Peterson et al. ( 1987) and by Crocker (1985), and one 

study of pine beetle damage in the Colorado Rockies 

by Walsh et al. (1990). 

To determine benefits from improvements in forest 

quality, a survey instrument was developed at the 

School of Forestry and Environmental Studies at Duke 

University. The instrument was refined through a 

series of focus groups comprised of 133 graduate 

students. Seven focus groups were used to test 

different question formats and alternative presentations 

of visual information. 

The sampling frame for the survey consisted of all 

households living within a 500 mile radius of Asheville, 

North Carolina. Asheville was selected as the 

geographical center of the sampling frame because it is 

centrally located within the southern Appalachians and 

is a frequent destination of vacationers visiting the 

mountains. The Blue Ridge Parkway, for example, 

passes within a few miles of Ashevilles city limits. A 

500 mile radius around Asheville approximates one 

days driving time, and includes most recreators and 

potential recreators. A socioeconomic survey of 

visitors to the Great Smoky Mountains National Park 

showed that 61 percent of visitors entering the park 

lived in Tennessee, North Carolina, or adjacent states 

(Peine and Renfro, 1988). The actual sampling frame 

was all households in telephone directories in zip codes 

contained wholly or partially. within the 500 mile radius. 

Each zip code was sampled proportionally to its 

population. A sample of 1 ,300 was drawn, of which 

100 were used for the pretest. 

The pretest version of the survey instrument was 

mailed to 100 households in January, 1991. Twentyone percent of the surveys were returned, with only 

one postcard follow-up mailing. Based on pretest 

results and comments from several survey experts, the 

final survey was revised and sent to 1,200 households in 

March, 1991. The format of the survey and the 

implementation procedures closely followed Dillmans 

(1978) recommendations. 

A brief description of the southern Appalachian 

spruce-fir forests (and the recent decline) was included 

in the cover letter. This description was expanded 

upon in the introduction to the survey. A map of the 

area was included to show where these forests occur. 

The first portion of the survey sought to establish the 

respondents prior knowledge of the area and the 

decline of the spruce-fir forests. The second section 

elicited some travel cost data from those who had 
visited the area and asked how familiar respondents 

are with the southern Appalachians. The third section 

of the questionnaire contained a description of the 

forest damage. Three levels of forest quality were 

illustrated using color photographs taken at Mt. 

Mitchell, North Carolina. The proportions of the 

remaining forests in each category were shown using a 

pie chart. The suspected causes of the damage and 

possible control measures were also described. 

Several payment vehicles were tested in the focus 

groups and in a mail pretest. The mail pretest used a 

voluntary contribution to a special fund. This seemed 

to cause some confusion, and a common reason for 

zero bids was that ''the government should pay." An 

increase in taxes was finally chosen as the payment 

method since it is familiar to most people and the use 

of tax revenues is a common way of providing public 

goods. 

The contingent valuation questions were placed on a 

page facing the description of the public good (forest 

protection). Two questions were asked: 1) How much 

would you be willing to pay for protection programs 

along roads and trails (about one-third of the 

remaining forests); and 2) How much would you be 

willing to pay to protect all of the remaining forests. 

The exact wording of the contingent valuation 

questions is given in the appendix. 

Previous studies have used several different answer 

formats for CV questions. For example: open ended 

responses, payment cards, and ''take-it-or-leave-it" 

formats (Mitchell and Carson, 1989). Although the 

''take-it-or-leave-it" format, also known as discrete 

choice, is increasingly popular among researchers, few 

studies have compared this elicitation method with the 

payment card format in an experimental context. 

Therefore, in order to test for differences across 

formats, we presented the payment card to half of our 

sample and discrete choice to the other half. 

The payment levels for the discrete choice questions 

were developed after responses to the mail pretest 

(which used a payment card only) were received. 

Pretest bids ranged from zero to $500. We selected 

ten payment levels within this range, which included 

most of the bids given by the pretest respondents. 

Sixty respondents were assigned to each level. The 

same payment level was used in both questions. 

We also included a question in which we asked 

respondents to partition their bids among three types 

of values: 1) use values; 2) bequest or vicarious 

consumption values; and 3) existence or intrinsic 

values. One question explored reasons for zero bids. 

The final section of the survey asked about 

respondents' participation in outdoor recreation, their 

involvement in "environmental behavior," and the usual 

socioeconomic characteristics. 

RESULTS 

A total of four mailings were sent to the potential 

respondents. The first mailing was the initial contact 

with the respondents. The second mailing was a 

follow-up postcard which reminded the respondents to 

return the survey. The next two mailings contained 

letters which tried to reinforce the importance of each 

respondents answers and the social importance of the 

entire study. The last two mailings also contained a 

replacement questionnaire. 

The mean willingness to pay for the two different levels 

of protection are shown in Table 1. The responses are 

broken out for two groups corresponding to the two 

different question formats (payment card versus 

discrete choice). As can be seen, respondents are 

willing to pay about $18 to 59 to protect the remaining 

undamaged forests along roads and trails (about one 

third of the higher quality forests), and about $20 to 99 

to protect all of the remaining high quality forests. 

The question format does not appear to affect response 

rates; 51 percent of the respondents returned 

completed discrete choice surveys, while 53 percent of 

the payment card surveys were returned. 

The respondents were asked to partition their bids 

according to use value, bequest value, and existence 

value. We recognize that there is debate in the 

literature about the cognitive abiity of individuals to 

disaggregate total value in this way, but we thought it 

would be useful to explore the relative contributions of 

each of these categories to total value. The results are 

shown in Table 2. As can be seen, existence value 

makes up about half of the total bid for both versions. 

The second largest category is bequest value. Use 

value makes up only about 9 to 13 percent of the total 

willingness to pay for forest protection. 

CONCLUSIONS 

This study has explored the benefits associated with 

protecting remnant spruce-fir forests in the southern 

Appalachians. Results indicate that the contingent 

valuation method coupled with visual information is an 

effective way of measuring preferences for forest 

quality. This assessment is based on response rates 

and the apparent ability of respondents to distinguish 

between protection levels. Further analysis of the data 

set is needed to determine the effect of the two 

93 

.. 
different CV question formats used in the survey and 

to compare value estimates from the CV and travel 

cost methods. 

It is clear that there is a substantial willingness to pay 

for protecting forest quality. Most of these benefits are 

related to nonuse values. From a policy perspective, 

this suggests that it would not be appropriate to 

finance forest quality protection programs entirely from 

user fees, since many of the benefits are realized by 

nonusers. However, we recognize that the method 

used in this study to partition values is somewhat 

simplistic and does not attempt to control for other 

public goods in each individuals basket of goods and 

services. Separability in environmental valuation is an 

issue needing further scrutiny. In addition, further 

analysis will explore differences in willingness to pay 

between forest users and nonusers, as well as the 

differences between the two different levels of 

protection. 

REFERENCES 

Barnard, J.E.; Lucier, AA.; Johnson, A.H.; Brooks, 

R.T.; Kamosky, D.F.; DuM, P.H. 1989. Changes in 

forest health and productivity in the United States of 

America: State-of-Science/Technology Report 16. 

Washington, DC: National Acid Precipitation 

Assessment Program. 

Chappelka, A.H.; Chevone B.I.; Seiler, J.R. 1985. 

Growth response of red spruce seedlings to acidic 

precipitation and ozone: preliminary results. In: 

Proceedings of the south wide forest disease 

workshop. Raleigh, NC: Department of Plant 

Pathology, North Carolina State University. 

Crocker, T.D. 1985. On the value of the condition of 

a forest stock. Land Economics 61(3):244-254. 

de Steiguer, J.E.; Pye J.M.; Love, C.S. 1990. Air 

pollution damage to U.S. forests: A survey of 

perceptions and estimates by scientists. Journal of 

Forestry 88(8):17-22. 

Dillman, DA. 1978. Mail and telephone surveys: The 

total design method. New York, NY: John Wiley 

and Sons, Inc. 

Dull, C.W.; Ward, J.D.; Brown, H.D.; Ryan, G.W.; 

Clerke, W.H.; Walker, R.J. 1988. Evaluation of 

94 

spruce and frr mortality in the southern Appalachian 

Mountains. USDA Forest Service Protection Report 

R8-PR 13. 

Gamer, J.H.B.; Pagano, T.; Cowling, E.B. 1989. An 

evaluation of the role of ozone, acid deposition, and 

other airborne pollutants in the forests of eastern 

North America. USDA Forest Service Gen. Tech. 

Rep. SE-59. 

Kramer, Randall A.; Healy, Robert; Mendelsohn, 

Robert. 1990. Forest valuation. Paper prepared for 

World Bank forest policy study. Washington, DC. 

Mitchell, Robert C.; Carson, R.T. 1989. Using 

surveys to value public goods: The contingent 

valuation method. Washington, DC: Resources for 

the Future. 

Peine, J.D.; Renfro, J.R. 1988. Visitor use patterns at 

Great Smoky Mountains National Park. U.S. 

Department of the Interior, National Park Service, 

Research/Resources Management Report SER-90. 

Southeast Regional Office, Atlanta, GA. 

Peterson, D.C.; Rowe, R.D.; Schulze, W.D.; Russell, 

G.W.; Boyce, R.R.; Elliot, S.R.; Hurd, B. 1987. 

Valuation of visual forest damages from ozone. 

Draft: USEPA Cooperative Agreement #CR812054-

02. 

Pyle, C.; Schafale, M.P. 1988. Land use history of 

three spruce-fir forest sites in southern Appalachia. 

J. Forest History 32:4-21. 

Richter, D.D.; Ring, K.S.; Witter, JA .. 1989. 

Moisture and nutrient status of extremely acid 

umbrepts in the Black Mountains of North Carolina. 

Soil Sci. Soc. Am. J. 53:1222-1228. 

Walsh, R.G.; Bjonback, R.D.; Aiken, RA.; Rosenthal, 

D.H. 1990. Estimating the public benefits of 

protecting forest quality. Journal of Environmental 

Management 30:175-189. 

Witter, JA.; Ragenovich, I.R. 1986. Regeneration of 

Fraser fir at Mt. Mitchell, North Carolina, after 

depredations by the balsam woolly adelgid. Forest 

Science 32(3):585-594. 

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APPENDIX 

Contingent Valuation Questions Used in Survey 

Suppose the only way to provide for these tree protection programs is to start a special conservation fund 

financed by increased taxes. Although most of the southern Appalachian spruce-fir forests are like those shown 

in photo without these Qrograms most of the forests will eventually decline to the level seen in photo C. The 

whole forested area is at risk from the insect and po1lution aarnaf,!;e. 

Version 1: Pavment Card Format 

13. What is the most money you would pay each vear to provide protection programs for spruce-fir forests 

along roads and trails in the southern Appalachian Mountains (which is about one-third of the 

remaining forest areas)? (Circle one amount.) 

$0 $4 $6 $8 $10 $15 $20 

$25 $30 $40 $50 $75 $100 $125 $150 

$175 $200 $250 $300 $350 $400 $450 $500 

other 

14. \Vhat is the most money you would pay each year to provide protection programs for all of the 

remaining spruce-fir forests in the southern Appalachian Mountains? (Circle one amount.) 

$0 $2 $4 $6 $8 $10 $15 $20 

$25 $30 $40 $50 $75 $100 $125 $150 

$175 $200 $250 

other$ __ 

$300 $350 $400 $450 $500 

Version 2 · Discrete Choice Format 

13. Would you pay each year to provide protection programs for spruce-fir forests along roads and 

trails in the southern Appalachian Mountains (about one-third of the remaining forest areas)? 

0 NO 

0 YES 

14. Would you pay each vear to provide protection programs for !ill of the remaining spruce-fir 

forests in the southern Appalachian Mountains? 

0 NO 

YES 

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96 

Table 1. Annual Willingness to Pay Per Household for Protection of Forest Quality. 

Forests along roads 

and trails 

All of the remaining 

forests 

Payment Card 

Version 

$18.08 

$20.86 

Table 2. Value Components of Total Willingness to Pay 

Type of Value 

Use 

Bequest 

Existence 

Payment Card 

Version 

8.2% 

29.6% 

58.5% 

Discrete Choice 

Version 

$59.22 

$99.57 

Discrete Choice 

Version 

12.8% 

29.8% 

55.9% 

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