United States

Department

of Agriculture

Forest Service

Rocky Mountain

Research Station

General Technical 

Report RMRS-GTR-275WWW

April 2012

Nonmarket Economic Values of 

Forest Insect Pests: An Updated 

Literature Review

Randall S. Rosenberger

Lauren A. Bell

Patricia A. Champ

Eric L. Smith
Rosenberger, Randall S.; Bell, Lauren A.; Champ, Patricia A.; Smith, Eric. 

L. 2012. Nonmarket economic values of forest insect pests: An updated 

literature review. Gen. Tech. Rep. RMRS-GTR-275WWW. Fort Collins, 

CO: U.S. Department of Agriculture, Forest Service, Rocky Mountain 

Research Station. 46 p.

Abstract

This report updates the literature review and synthesis of economic 

valuation studies on the impacts of forest insect pests by Rosenberger and 

Smith (1997). A conceptual framework is presented to establish context for 

the studies. This report also discusses the concept of ecosystem services; 

identifies key elements of each study; examines areas of future research; 

and includes appendices that further explain nonmarket valuation 

methods, a narrative of each study, and tables that summarize each study. 

The primary services affected by insects are restricted in the literature to 

include recreation, aesthetic or scenic beauty of landscapes, and property 

values. Monetary metrics across studies include willingness to pay 

estimates per acre, per person or household, per tree, and/or for various 

levels of damages. While this literature is limited and heterogeneous, 

individual studies may prove useful in assessing current and future policies 

associated with forest insect pests in the United States.

Keywords: forest insect pests, nonmarket valuation, economic methods, 

ecosystem services, climate change

The Authors

Randall S. Rosenberger is an environmental economist at Oregon State 

University in the Department of Forest Ecosystems and Society, Corvallis, 

Oregon.

Lauren A. Bell is a graduate student at Oregon State University in the 

Applied Economics program, Corvallis, Oregon.

Patricia A. Champ is an economist for the USFS Rocky Mountain Research 

Station, Fort Collins, Colorado.

Eric L. Smith is with the Forest Health Technology Enterprise Group, Fort 

Collins, Colorado.

Available only online at http://www.fs.fed.us/rm/pubs/rmrs_gtr275.html.

Cover photo: Beetle-killed trees in Glacier National Park 

(William M. Ciesla, Forest Health Management 

International, Bugwood.org photograph).
Contents

Introduction............................................................................................... 1

Role of Forest Insects .......................................................................... 2

A Conceptual Framework........................................................................... 3

Mountain Pine Beetle ......................................................................... 4

Key Elements of Economic Valuation Studies ............................................. 6

Forest Insect Pests Studied................................................................... 6

Regions Studied.................................................................................. 7

Land-Use Areas Studied...................................................................... 8

Stakeholders....................................................................................... 8

Values Estimated................................................................................. 8

Nonmarket Valuation Methods Used .................................................. 9

Forest Insect Impact Indicators Used................................................... 9

Discussion/Synthesis of the Literature ....................................................... 9

Conclusions and Areas of Future Research............................................... 11

References Cited...................................................................................... 13

Appendix A: Economic Nonmarket Valuation Methods............................ 16

Appendix B: Extended Summaries of Studies ........................................... 18

Appendix C: Summary Tables of Nonmarket Economic Studies of 

 Forest Insect Pest Damages............................................................... 36

USDA Forest Service RMRS-GTR-275WWW. 2012. 1

Introduction

Forests possess many components and processes 

that provide an array of ecosystem goods and services: timber, energy and water savings, pollution 

reduction, livestock forage, habitat for plants and animals, recreation opportunities, aesthetic landscapes, 

and biodiversity that enhance people’s quality of life 

(Kline 2007). Forest resources also support local and 

regional economies through jobs and income generated from forestry, agriculture, tourism, and locational 

decisions of businesses, retirees, and others (Loomis 

2002; Rosenberger and English 2005). The capability 

of a forest to provide these and many other ecosystem 

services and to maintain the quality of those ecosystem 

services depends on its health. A healthy forest is an 

essential component of a healthy ecosystem—a natural 

system that is capable of self-renewal, resilient in its 

response to disturbances (such as pest, fire, and other 

non-human and human-caused disturbances), and able 

to sustain the integrity of the natural and cultural benefits derived from it.

Many factors affect the health of a forest: air quality, fire, forest management practices and other human 

activities, wind, drought, disease, and insects. If 

managers want to take relevant tradeoffs into consideration, they need to be aware of the potential impacts 

that these disturbances may have on the quantity and 

quality of ecosystem services derived from forests. 

In addition, managers and other stakeholders need 

to understand the cause and effect of linkages between disturbances so that preventative action against 

one disturbance does not lead to the occurrence of 

another. Also, since ecosystems and forests are constantly changing, information on the impacts of these 

disturbances and their relationship to the health and 

sustainability of forest structures and processes is 

needed (Averill and others 1995).

Forest managers can weigh the tradeoffs associated with various management options in a number of 

ways. One method for assessing tradeoffs—economic 

benefit-cost analysis—is to compare the benefits of a 

management action with its costs. A complete benefitcost analysis requires that all measurable benefits and 

costs be included. In the context of evaluating management actions to deal with forest threats, many of 

the benefits of a management action will be nonmarket 

goods and services. In a market setting, price is an indicator of the worth of a good representing its marginal 

value. Markets exist for some forest products, such 

as timber and livestock forage. However, other forest 

benefits, such as pollution reduction, aesthetic views, 

and some recreation opportunities, may not have markets, thus lacking prices as signals of their economic 

worth. These goods and services without markets 

are referred to as nonmarket goods and services. 

Nonmarket valuation techniques are used to estimate 

economic values for such goods.

The purpose of this report is to synthesize and evaluate the nonmarket valuation literature that quantifies 

the impacts of forest insect pests on ecosystem services 

(i.e., recreation, aesthetics, and homeowner benefits of 

property). The empirical estimates, economic measures of forest insect pest damages to nonmarket goods 

and services, reviewed in this report may be used in 

a benefit-cost analysis of forest pest management decisions/policies. Over the last four decades more than 

20 nonmarket valuation studies pertaining to the economic effects of forest pests have been published (see 

Table 1). Forest diseases and pathogens have similar 

effects on forest health and derived economic values; 

however, limited valuation research was found for 

them. Therefore, we limit the scope of this review to 

forest insect pests.

Forest insect pests may directly affect forest commodities, such as timber, by damaging or killing trees, 

or they may indirectly affect non-commodity benefits, 

such as recreation experiences, by reducing the aesthetic appeal of areas where people recreate. Insects 

attack trees, causing discoloration of foliage, defoliation, or both, resulting in dead and down trees and 

visible damage to forests, which, in turn, may reduce 

the benefits derived from the forest and its products. 

They can also have negative impacts on the flow of 

ecosystem services provided by a forest. As with any 

damage, there is an associated cost or loss. The amount 

of this loss depends on a variety of factors, including the condition, type, and location of the forest, the 

magnitude of the outbreak, the kind of insect, the quality and intensity of the desired experience (aesthetic, 

recreational), and the scope of affected stakeholders. 

One important question facing forest managers is 

how many resources they should allocate toward the 

protection of forest health versus other management 

needs. The answer to this question depends partly on 

the level of physical damages that results from forest insect attacks. Another part of the answer depends 

on the economic value of these damages. The studies 

reviewed here, and their estimates of nonmarket values, can be used in an economic evaluative framework 

that enables forest managers to make more informed 

decisions.
2 USDA Forest Service RMRS-GTR-275WWW. 2012.

Role of Forest Insects

Another concern that received little attention in the 

past economic studies is the role of forest insects in the 

natural processes of a forest. Forest insects are an integral part of the forest ecosystem (Anhold and others 

1996). A healthy forest can sustain tree damages due to 

insects, and may even benefit from these disturbances. Forest pests act as natural thinning agents and can 

change the composition of the forest to provide more 

diversity and energy flow (e.g., increased sunlight penetration may increase understory growth, providing 

more forage for wildlife). The view that forest insects 

primarily cause negative impacts is based on a static 

view of a forest. When the dynamics of forest structures and processes are considered, forest insects may 

have an important and integral role in the complexity 

and overall health of a native forest. Therefore, economic models should consider the sustainability of the 

flow of ecosystem services from a forest in the form of 

products and services provided.

This report updates Rosenberger and Smith (1997) 

by reproducing and updating the literature review 

through summarizing the published economic valuation studies on the impacts of forest insect pests on 

nonmarket forest ecosystem services. It presents a 

conceptual framework to establish context for the 

economic valuation studies; discusses the concept of 

ecosystem services; identifies key elements of each 

study; provides a synthesis of the literature and areas of 

future research; and includes appendices that provide a 

narrative of each study and tables that summarize the 

studies. The scope of what constitutes a forest in the 

Table 1—Economic studies of forest insect pests.

Study code Author(s) Year Title

1 Payne and others 1973 Economic analysis of the gypsy moth problem in the Northeast: II. Applied 

 to residential property

2 Wickman and Renton 1975 Evaluating damage caused to a campground by Douglas-fir tussock moth

3 Michalson 1975 Economic impact of mountain pine beetle on outdoor recreation

4 Moeller and others 1977 Economic analysis of the gypsy moth problem in the Northeast: III. 

 Impacts on homeowners and managers of recreation areas

5 Leuschner and Young 1978 Estimating the southern pine beetle’s impact on reservoir campsites

6 Walsh and Olienyk 1981 Recreation demand effects of mountain pine beetle damage to the quality 

 of forest recreation resources in the Colorado Front Range

7 Walsh and others 1981a Value of trees on residential property with mountain pine beetle and 

 spruce budworm in the Colorado Front Range

8 Walsh and others 1981b Appraised market value of trees on residential property with mountain pine 

 beetle and spruce budworm damage in the Colorado Front Range

9 Loomis and Walsh 1988 Net economic benefits of recreation as a function of tree stand density

10 Walsh and others 1989 Recreational demand for trees in National Forests

11 Walsh and others 1990 Estimating the public benefits of protecting forest quality

12 Jakus and Smith 1991 Measuring use and nonuse values for landscape amenities: a contingent 

 behavior analysis for gypsy moth control

13 Haefele and others 1992 Estimating the total value of forest quality in high elevation spruce-fir forests

14 Miller and Lindsay 1993 Willingness to pay for a state gypsy moth control program in New 

 Hampshire: a contingent valuation case study

15 Holmes and Kramer 1996 Contingent valuation of ecosystem health

16 Thompson and others 1999 Valuation of tree aesthetics on small urban-interface properties

17 Haefele and Loomis 2001 Using the conjoint analysis technique for the estimation of passive use 

 values of forest health

18 Kramer and others 2003 Contingent valuation of forest ecosystem protection

19 Asaro and others 2006 Control of low-level Nantucket pine tip moth populations: a cost 

benefit analysis

20 Holmes and others 2006 Exotic forest insects and residential property values

21 Huggett and others 2008 Forest disturbance impacts on residential property values

22 Price and others 2010 Insect infestation and residential property values: a hedonic analysis 

 of the mountain pine beetle epidemic
USDA Forest Service RMRS-GTR-275WWW. 2012. 3

following studies ranges from large, publicly owned 

tracts of forested land to small, privately owned groups 

of trees (residential backyards). The services affected 

by insects are restricted in the literature to include 

recreation, aesthetic or scenic beauty of landscapes, 

timber production and property values. The economic 

values reported in the summaries of the studies are all 

given in the dollar value from the year of publication. 

Some of the estimates in a particular study are based 

on the worth of the property at the time of the study; 

therefore, it may not be correct to assume that property values have increased at the same rate as the price 

index.

The articles included in this study were screened by 

pre-determined criteria as a list of keywords that define 

the context of the review: forest pests (insects, diseases, and pathogens), nonmarket valuation, economics, 

forest fire, climate change, and forest management. An 

extensive literature search using various combinations 

of the keywords was conducted on databases such as 

Google Scholar, AgEcon Search, EconLit, RePEc, and 

EVRI. Only those studies conducted on forests in the 

United States were retained. This resulted in 34 articles 

that meet some or all of the keywords listed above. 

Ruling out all conceptual applications of economics 

and keeping only articles that contained an empirical model and numerical data narrowed the collection 

of articles. The final set of 22 articles are nonmarket 

economic valuation studies in the United States that 

include willingness to pay estimates obtained through 

the use of the travel cost, hedonic pricing, cost benefit 

analysis, contingent choice, or contingent valuation 

methods.

A Conceptual Framework

It is evident in the literature that there are many natural and human influences affecting the severity of forest 

pest outbreaks: fire, climate, and forest management. 

Knowledge of these influences and their relationship to 

forest pest populations can be useful when taking preventative action or controlling pest outbreaks and their 

impacts. The conceptual framework presented here 

provides a summary of the connections between forest 

pests and climate change, forest management, forest fire, and ecosystem services, using mountain pine 

beetle (Dendroctonus ponderosae) as an example. The 

intent of the framework is to provide context for the research presented in the economic valuation studies on 

the impacts of forest insect pests on nonmarket forest 

ecosystem services. Figure 1 displays our conceptual 

framework of how ecosystem services are affected by 

management and natural disturbances through their 

impacts on forest condition. Climate change overlays 

this framework in that it can directly and indirectly affect forest condition, management actions, and natural 

disturbances. Economic values derived from ecosystem services act as signals of social preferences and 

feed back into management action decisions.

Humans depend upon the Earth’s ecosystems to provide goods and services that are critical for survival 

and the achievement of quality of life. The concept of 

ecosystem services was initially proposed as a way to 

describe the contributions of intact ecosystems to human well-being and advocate ecosystem protection 

(Kline 2007). Fisher and others (2008, 2009) and de 

Groot and others (2002) offer similar definitions of 

Figure 1—Conceptual framework of disturbances on ecosystem services and economic values.
4 USDA Forest Service RMRS-GTR-275WWW. 2012.

ecosystem services: the natural processes and components of ecosystems utilized, directly or indirectly, to 

provide goods and services that satisfy human needs 

and produce human well-being. Defined in this way, 

ecosystem services are a product of ecosystem structures and processes. The functions, produced by the 

structures and processes of ecosystems, are conceptualized as ecosystem goods and services when human 

values are implied.

The composition, structure, and function of ecosystems have been rapidly altered throughout the history 

of human life on earth (Kremen and Ostfeld 2005). 

Natural disturbances such as pests and fire also directly 

and indirectly affect the delivery of ecosystem goods 

and services. For example, forest fires compete with 

timber and wood fiber industries, but they also affect 

recreational opportunities and the intrinsic value of a 

landscape, although these effects are naturally recoverable over time (Englin and others 2001). Similarly, 

pest outbreaks can directly and negatively affect the 

stock and flow of ecosystem services from forests; 

they also have indirect effects through their contributions to fire risk and release of stored carbon. Forest 

mortality caused by wildfire, insects, and diseases are 

principal sources of carbon emissions from forests in 

the western United States (Stephens 2005) and can lead 

to widespread loss of centuries’ worth of carbon storage (Millar and others 2007).

The interactions between pests and their hosts 

affect the structures and processes of forest ecosystems. Thus, pests directly affect the forest’s ability to 

perform ecosystem functions. When a change in ecosystem functioning occurs, it is valued in terms of the 

goods and services provided to humans. The value of a 

change in ecosystem services, caused by a forest pest 

outbreak, is dependent on the geographical context in 

which it occurs, including economic, social, and political factors (Kremen and others 2007). If the change 

in an ecosystem service is significant or the associated 

value is high, public policy and forest management 

may be impacted.

Pest populations are causally related to climate 

change, forest management practices, and forest fire. 

Climate change, forest management, and forest fire 

affect the composition of plants, the size of pest populations, and biotic and abiotic factors affecting both 

groups (Kremen and others 2007). Changes in landscape structure, caused by fire or human action, affect 

pest populations, host tree populations and their interactions at individual, community, and population scales 

(Kremen and others 2007). The population of many 

pests is affected by temperature, and the availability 

of susceptible host trees for food, reproduction, and 

overwintering. Similarly, the availability of host trees 

is affected by biotic and abiotic factors, forest management practices and forest fire.

In long-lived ecosystems such as forests, pests are 

often primary disturbance agents (Logan and others 

2003). Forest pest outbreaks can impact the dynamics 

of ecosystems through tree morbidity and mortality, potentially over extensive areas (Kurz and others 2008). 

The mountain pine beetle, one of the most aggressive 

forest pests, is responsible for a considerable amount 

of tree mortality in North America (Carroll and others 

2003; Romme and others 1986). Trees act as primary 

producers, carbon storage compartments, and support 

structures for other life and natural processes within 

forests. Tree mortality, caused by forest pests, can 

contribute to short term losses in timber production 

(Romme and others 1986), act as hazard trees in recreation areas (Walsh and Olienyk 1981), reduce the 

aesthetic beauty of landscapes (Jakus and Smith 1991), 

and depreciate the value of housing near outbreak areas (Price and others 2010). All of the estimates of 

willingness to pay to prevent negative effects on the 

aforementioned forest ecosystem services are positive 

(see Appendix C).

Dead trees may also serve as fuel for forests’ second greatest disturbance agent—fire (Logan and 

others 2003). When a forest fire occurs, many of the 

forest ecosystem functions are damaged or destroyed. 

Functions such as nutrient and water regulation, carbon 

sequestration, food/raw material production, species 

composition, aesthetic information, recreation, and biodiversity can be disrupted (de Groot and others 2002; 

McCullough and others 1998). Ecosystem services produced by these functions include, but are not limited 

to, maintenance of local air quality; water flow timing, 

quantity and quality; influence on climate; building and 

manufacturing inputs; hunting and gathering of fish, 

game, and plant food sources; enjoyment of scenery; 

and travel in natural settings (de Groot and others 2002).

Mountain Pine Beetle

Forest pest disturbances are not always detrimental to the maintenance of ecosystem integrity (Logan 

and others 2003). The mountain pine beetle and 

other insects are an integral part of the forest ecosystem. Endemic populations of mountain pine beetle 

aid in the process of forest regeneration and the continuation of forest health. Romme and others (1986), 

citing Mattson and Addy (1975) and Moore and Hatch 

(1981), showed that outbreaks of mountain pine beetle, 
USDA Forest Service RMRS-GTR-275WWW. 2012. 5

among other insects, led to only a brief drop in a forest’s primary productivity. Over the short term (5-20 

years), mountain pine beetle populations, at natural or 

outbreak levels, introduced more variation into long 

term primary production resulting in a more equitable 

distribution of biomass and resources among canopy, 

sub-canopy, and understory trees (Romme and others 1986). Beetles act as thinning agents, attacking 

larger, older trees that create openings for new growth 

and contribute fuel for eventual stand replacing fires 

(Anhold and others 1996). Flannigan and others (2000) 

showed the timing of the most active fire months was 

offset from the concentration of mountain pine beetle 

attacks by approximately a month (i.e., beetle attacks 

generally precede fires), potentially increasing fire size 

and intensity.

The concentrations of mountain pine beetle attacks generally occur in the late spring and in mature 

pine stands. Thus, the abundance of mature pine trees 

may regulate whether increasing temperatures, due to 

climate change, will promote mountain pine beetle 

outbreaks (Berg and others 2006). The survival of 

individual host trees depend, in part, on beetle-tree 

interactions and tree characteristics, such as size, age, 

bark thickness, phloem thickness, and resin pressure 

(Bradley and Tueller 2001). These characteristics that 

describe an individual tree’s structure relate to its predisposition or susceptibility to mountain pine beetle 

attack. Large, slow growing trees are the preferred host 

of beetles due to their inability to resist the establishment of adults in the inner bark or phloem layer (Berg 

and others 2006). Keane and others (2002) argued that, 

at the stand level, the activities of forest insect pests 

and diseases are directly related to the stress and reduced vigor of tree species. As stand biomass and plant 

density increase, the competition among trees becomes 

more intense, causing increased stress. Management 

actions, such as fire suppression, and climate changes 

(e.g., in temperature and precipitation) may also stress 

trees and increase biomass, thus contributing to the intensity and location of beetle outbreaks.

For the past several decades, forest managers have 

used historical ecosystem conditions as the standard 

for assessing ecological sustainability, variability, 

and integrity. These ideals were used to set management goals for maintaining ecological systems and the 

goods, services, and amenities they provide (Lackey 

1998; Millar and others 2007). However, in large part 

due to changes in climate, unprecedented rapid environmental changes are expected in the future (Millar 

and others 2007). Climate change, in particular global warming, may affect forest pest populations. The 

population dynamics of many forest pest species is 

dependent on temperature, which has a large effect 

on population size and distribution (Logan and others 

2003). Changes in temperature and precipitation influence the survival, reproduction, and range of mountain 

pine beetle (Ayers and Lombardero 2000). In the 

western United States, warming annual temperatures 

have caused an upward shift in the range of acceptable 

habitat for mountain pine beetle. This has allowed the 

mountain pine beetle to populate high-elevation pine 

forests that were formerly uninhabitable (Kurz and 

others 2008). Global warming is projected to continue 

into the future and thus the range of the mountain pine 

beetle is expected to continue to expand (Kurz and others 2008). Likewise, the frequency, severity, and spatial 

distribution of spruce budworm outbreaks are expected 

to increase (Logan and others 2003).

Warmer summer temperatures brought on by global 

warming may decrease precipitation and lengthen the 

growing season (Millar and others 2006). Berg and 

others (2006), when comparing mountain pine beetle 

outbreaks to summer temperature, found that mountain 

pine beetle outbreaks occur after 5- to 6-year periods 

of warm summer temperatures. Their models estimated 

that, in Alaska, “the odds of a large outbreak occurring increased by 17.8 times (95% CI = 12.6-25.2) with 

each one-degree Celsius increase in average temperature” (p. 224), reaching 50% chance of occurrence at 

an average temperature of 10.3 degrees Celsius. The 

warm summer temperatures contribute to higher rates 

of mountain pine beetle reproduction and droughtinduced stress on trees (Berg and others 2006; Millar 

and others 2006). First, the warmer temperatures during the late spring allow the mountain pine beetle to 

hatch, attack, and breed earlier in their life cycle, which 

induces a longer growing season for the larvae (Berg 

and others 2006). Second, direct solar radiation increases phloem temperatures in host trees and can as 

much as double the maturation rate of larvae, causing 

them to grow into adults in 1 year rather than 2 (Werner 

and Holsten 1985).

Warmer winter temperatures also affect the size 

and abundance of mountain pine beetle populations. 

If winters fail to reach the low temperatures historically consistent in the area, then winter survival of the 

mountain pine beetle increases in northern latitudes 

and in higher elevations. Direct measurements and records of wildland tree populations, cited by Ayers and 

Lombardero (2000), indicate that 100% mortality of 

the pine beetle occurs when air temperatures reach -16 

degrees Celsius or less. This also implies that mountain pine beetles are living as far north as the winter 
6 USDA Forest Service RMRS-GTR-275WWW. 2012.

temperatures will allow (Ayers and Lombardero 2000). 

Outbreaks of mountain pine beetle and other forest 

pests have also been attributed to local forest disturbances such as wind throw, floods, disease, drought, 

ice and snow damage, defoliation, landslides, and root 

disease (Logan and others 2003; Werner and others 

1985). The occurrence of disturbances weakens tree 

stands creating hospitable breeding grounds for the 

insects.

Interactions between disturbances could be synergistic and may change rapidly with climate (Flannigan 

and others 2000). The potential future impacts of 

climate change on ecosystems have been estimated 

using climate and vegetation models, simulating two 

possible greenhouse gas emissions scenarios: high 

and low. These results show that temperatures across 

Oregon will increase 7 to 8.5 degrees Celsius by 

the end of the 21st century (Millar and others 2006). 

Patterns in precipitation, wind, and cloudiness are expected to change with a changing climate (Flannigan 

and others 2000). These scenarios reveal a 10 to 24% 

decrease in precipitation in the winter and a decrease 

of 10 to 40% in the summer in the Northwest (Millar 

and others 2006). While summers are already generally dry, the impact on winter precipitation may be 

significant and have exacerbating effects on pests, 

fires, and overall forest health. Thus, while forest 

management may help mitigate and adapt to factors 

affecting ecosystem services, climate change may 

exacerbate some of these efforts directly through 

changes in temperature and precipitation, and indirectly through increasing the frequency and severity 

of pest and fire disturbances. In order to evaluate the 

effects of climate change, forest fire, pests, and forest 

management practices on forest ecosystem services, 

information about the changes in the ecosystem services and their social value is required (Kline 2007). 

Describing changes in ecosystem services is often difficult due to lack of information about causal 

relationships, forest conditions, and policy and management activities. If measures of output changes 

exist, then the scope of inference is often limited and 

not transferable beyond a specific landscape (Kline 

2007). Furthermore, without a rigorous and consistent 

classification system, double counting of ecosystem 

services benefits and confusion about what is being 

evaluated abound (Boyd and Banzhaf 2006; Brown 

and others 2007; Fisher and others 2008, 2009; Kline 

2007).

The nonmarket valuation literature on forest insect 

pests is heterogeneous, as detailed below. While proxy 

measures are limited to a narrow set of ecosystem 

services (trees, views, recreation), monetary and 

other metrics are based on a wide range of units, including per acre, per tree, per person and per day, and 

vary based on level of impacts, including 3-7%, 15% 

and 30% damage in the near and/or far view. This 

heterogeneity in the literature prevents derivation of 

summary measures of monetary worth across studies 

for general use in assessing forest pest policies and 

practices. Instead, we suggest the reader use the summary tables below and detailed descriptions provided 

in the appendices to this report to identify a study or 

subset of studies relevant to his/her analysis context. 

If the reader finds no studies relevant to his/her needs, 

then we suggest he/she consider conducting an original study that directly meets his/her needs and adds to 

this body of research.

Key Elements of Economic Valuation 

Studies

There are many uses of the information contained 

in the economic valuation studies reviewed. The key 

elements identified in these studies help to define the 

context for the transfer or application of study outcomes to different contexts (Rosenberger and Smith 

1997). These key elements also define the context 

of the data (e.g., region, forest type, kind of insect, 

magnitude of damages or infestation, visibility, and 

stakeholder groups represented), the valuation methodology used, choice of indicator variables, and 

the values at stake. The studies reviewed are listed 

in Table 1. The codes shown in the first column of 

Table 1 will be used to cross-reference the studies 

in Tables 2-8, and written and tabular summaries in 

Appendices B and C, respectively.

Forest Insect Pests Studied

The forest insect pests studied are listed in Table 2. 

Eight types of insects have been studied across the economic valuation literature, but they are not exhaustive 

of insects that impact forest health. Forest diseases and 

pathogens are little studied in the economic valuation 

literature. There are many types of diseases (rust and 

stem decay, fungi, mistletoe) and pathogens (seedling, 

root, wilt, canker, and foliage pathogens); still little is 

known about the magnitude or distribution of their effects (Kovacs and others 2011). Two notable exceptions 

include a valuation study on sudden oak death, published by Kovacs and others (2011) and Meldrum and 

others (2011) study of white pine blister rust. However, 

these recent studies on diseases and pathogens, along 
USDA Forest Service RMRS-GTR-275WWW. 2012. 7

with a myriad of other disturbances both natural (e.g., 

forest fire, wind throw, climate change, and drought) 

and human induced (e.g., silvicultural practices, pollution, and forest fire prevention), are not included in this 

review as we focus on forest insect pests.

The gypsy moth, Lymantria dispar, is an introduced 

pest that originated in Europe and Asia. The most common host species for the gypsy moth are oak and aspen 

trees (Liebhold 2003). The gypsy moth has little effect 

on commercial tree stands, but imposes a large impact on ornamental trees and trees in recreation areas 

(Haefele and Loomis 2001).

The Douglas fir tussock moth, Orgyia pseudotsugata, is a native defoliator of fir trees in western North 

America. Preferred hosts include Douglas fir, white fir, 

and grand fir trees. Severe outbreaks, which develop 

explosively, have occurred from British Columbia to 

Arizona and New Mexico. Defoliation caused by the 

Douglas fir tussock moth can kill or weaken many 

trees. Weakened trees suffer from retarded growth and 

can eventually be killed by bark beetles (Wickman and 

others 1998).

The mountain pine beetle, Dendroctonus ponderosae, is an insect native to the forests of western 

North America (Kurz and others 2008). Populations of 

mountain pine beetle can be found from Alaska and 

the Yukon Territory to the southwestern United States 

(Berg and others 2006). It is the most aggressive of the 

bark beetles found in western North America where it 

primarily infests and kills lodge pole pine, ponderosa 

pine, white bark pine, and limber pine (Jenkins and 

others 2008).

The southern pine beetle, Dendroctonus frontalis, is 

a native insect in the southeastern United States. It can 

attack any species of pine, but is found most commonly in loblolly, shortleaf, Virginia, pond, and pitch pines. 

Its range extends from Pennsylvania to Texas where it 

impacts commercial pine stands and wilderness areas 

(Haefele and Loomis 2001).

The spruce budworm, Choristoneura occidentalis, 

is native to most fir stands in the western United States. 

The spruce budworm is the most widely distributed defoliating insect in this region, impacting commercial 

Douglas and grand fir stands in the Pacific Northwest.

The balsam woolly adelgid, Adelges piceae, is an 

introduced species from Europe. It is considered to be 

a serious pest to the Christmas tree industry, seed production, and forested landscapes. The balsam woolly 

adelgid is distributed throughout the United States, but 

found primarily in the Pacific Northwest and the southern Appalachian Mountains (Michigan DNRE 2001).

The Nantucket pine tip moth, Rhyacionia frustrana, is a native forest insect pest that ranges from 

Massachusetts to Florida and as far west as Texas. 

The Nantucket pine tip moth is most damaging to pine 

plantations and to wild pine seedlings in open areas. 

It poses problems because of forestry trends that favor the establishment of large areas of pine plantations 

(Asaro and others 2006).

The hemlock woolly adelgid, Adelges tsuga, was 

introduced to the United States from Japan in the 

1950s. It causes mortality among eastern and Carolina 

hemlocks. The hemlock woolly adelgid affects both 

ornamental hemlocks and hemlock forests in the 

Northeast, mid-Atlantic, and the South (Holmes and 

others 2006).

Regions Studied

The regions where the economic studies were conducted are identified in Table 3. The majority of the 

studies were conducted in the mountainous West 

and Northeast. The mountainous West region was of 

Table 2—Forest insect pests studied.

Insect pest Study code

Gypsy moth (Lymantria dispar) 1, 4, 12, 14, 17

Douglas-fir tussock moth 

(Orgyia pseudotsugata) 2

Mountain pine beetle 

(Dendroctonus ponderosae) 3, 6, 7, 8, 9, 10, 11, 22

Southern pine beetle 

(Dendroctonus frontalis) 5, 17

Spruce budworm 

(Choristoneura occidentalis) 7, 8, 11, 17

Balsam woolly adelgid 

(Adelges piceae) 13, 15, 18

Nantucket pine tip moth 

(Rhyacionia frustrana) 19

Hemlock woolly adelgid 

(Adelges tsuga) 20, 21

Unidentified 16

Table 3—Regions of the United States where economic 

studies of forest insect pests were conducted.

Region Study code

Mountainous West 6, 7, 8, 9, 10, 11, 22

Northeast 1, 4, 12, 14, 17, 20, 21

Northwest 3, 17

South 5, 19

Southeast 13, 15, 17, 18

Southwest 2, 16
8 USDA Forest Service RMRS-GTR-275WWW. 2012.

particular interest to the USDA Forest Service in the 

late 1970s and early 1980s when a project series was 

published assessing the impacts of mountain pine beetle and western spruce budworm in the Colorado Front 

Range (Walsh and Olienyk 1981; Walsh and others 

1981a, b). Five studies were conducted in the Northeast 

region to measure the economic impacts of the gypsy 

moth and, most recently, two studies assessing the impacts of the hemlock woolly adelgid on property values 

(Holmes and others 2006; Huggett and others 2008). 

The remaining studies investigate the Douglas-fir tussock moth in the Southwest, the mountain pine beetle 

and spruce budworm in the Northwest, the southern 

pine beetle and Nantucket pine tip moth in the South, 

and the balsam woolly adelgid in the Southeast.

Land-Use Areas Studied

The type of land-use designation directly influences 

the magnitude and type of impact a forest insect pest 

can have on an area. The three land-use designations 

are urban, wildland, and the wildland-urban interface 

(i.e., “areas where human-made developments are in 

proximity to or intermingle with undeveloped wilderness” (Price and others 2010, p. 417)), as listed in 

Table 4.

The extent of the damage, measured as monetary 

losses, caused by the insects is expected to be greater in the urban and wildland-urban interface areas 

(Rosenberger and Smith 1997). This is because the 

amount of damage caused by the insects is more visible 

than in forested wildland areas, thus directly affecting 

a larger body of stakeholders. Property values in urban and wildland-urban interface areas can be greatly 

affected by tree damage and mortality. Moreover, as 

established in Holmes and others (2006), relationships 

show that tree health on both individual and neighboring properties matter. As the insect damage becomes 

more distant, the negative effect on property values diminishes. Insect damage will eventually fade through 

the establishment and growth of young trees, but the 

effect it has on recreation, aesthetic values, and property values in the short run can be considerable. Some 

of the studies are concerned with the value added by 

trees to recreation activities, property values, and aesthetic viewsheds. Others are primarily concerned with 

forest-dominated wildland areas, where the supply of 

recreation and forest commodities are most affected 

(Rosenberger and Smith 1997).

Stakeholders

The way forest ecosystems are managed is of great 

importance, as is the recognition of the relevant stakeholders to the area. The values that are attributed to 

an ecosystem, and the goods and services it provides, 

depend upon the stakeholders benefiting from these 

services (Hein and others 2006). A stakeholder is any 

group or individual who can affect or is affected directly or indirectly by forest ecosystem services and 

the changes in those services as a result of an insect 

infestation (Hein and others 2006; Rosenberger and 

Smith 1997). When formulating any management plan, 

the stakeholders should always be considered, if not included, in the decision making process. Table 5 lists the 

stakeholders identified in the economic studies. Forest 

managers, planners, and decision makers are implicit 

throughout the list.

Table 5—Stakeholders identified in forest insect pest studies.

Stakeholder Study code

General public 13, 14, 15, 17, 18

Homeowners 1, 4, 7, 12, 16, 20, 21, 22

Land managers 4, 19

Real estate appraisers 8

Recreationists 2, 3, 5, 6, 9, 10, 11, 13, 15

Table 4—Forest insect pest studies by designated land use 

area.

Land-use area Study code

Urban 1, 4, 12, 20, 21

Wildland 2, 3, 5, 6, 9, 10, 11, 13, 15, 17, 18, 19

Wildland-urban 

interface 7, 8, 14, 16, 22

Values Estimated

Recreation is the most commonly identified value 

in the studies. Other values that are identified include 

aesthetics, passive-use (including option, existence, 

and bequest values of forest health), property, and total value (the sum of use and passive use values) (see 

Table 6). Over the past few decades the United States 

has experienced rapid growth in communities with recreational opportunities and natural amenities (Price and 

others 2010). The result has been a dramatic increase 

in development in the wildland-urban interface. The 

more recent studies focus on the contributed residential 

property value of trees and the total value of forests. 

The economic estimates included in the studies are 

primarily short-term responses to a static comparison 

of forest conditions. Therefore, these estimates do not 
USDA Forest Service RMRS-GTR-275WWW. 2012. 9

necessarily include the social, cultural, and ecological 

importance of forest functioning, such as maintaining 

biodiversity, sustaining natural processes, and providing historic cultural identity (Rosenberger and Smith 

1997).

Discussion/Synthesis of the Literature

Overall the reviewed studies show that people value 

many attributes, including quality, of forests. Trees add 

to the market value of homes, enhance recreational experiences, and provide a host of ecosystem services. 

Forest pests, especially when in outbreak status, can 

substantially affect forest quality and the flow of ecosystem services provided by them. Thus, forest pest 

outbreaks negatively affect property values, recreational experiences, and the provision of ecosystem 

services. Both public and private lands are affected 

by insect damages, especially in areas where there are 

large numbers of users and passers-by, such as campgrounds, urban parks, and scenic greenways. Decision 

makers are interested stakeholders in determining the 

relevant extent of insect damage mitigation to undertake. Land-use zones include urban, wildland-urban, 

and wildland areas.

The techniques employed in the economic estimation of these nonmarket damages (benefits) of pest 

infestations (control programs) are the contingent 

valuation, travel cost, and hedonic pricing methods. 

Also employed are direct cost estimates through the 

estimation of replacement costs and financial losses. 

The relevant metrics used in these measurements include dollars (market prices, expenditures, willingness 

to pay, or consumer surplus) and recreation days. The 

Table 8—Forest insect impact indicator variables used in 

economic studies.

Impact indicator Study code

Number of trees 1, 2, 6, 7, 8, 9, 10, 11, 17, 22

Presence of insect 4, 18

Tree size 6, 7, 8, 9

Visible damage 2, 3, 4, 6, 7, 12, 13, 14, 15, 19, 20, 21

Other 5, 6, 7, 8, 16

Table 6—Values identified and measured in economic studies 

of forest insect pests.

Value Study code

Aesthetics 2, 12

Passive-use 11, 13, 15, 17

Property 1, 7, 8, 16, 20, 21, 22

Recreation 2, 3, 4, 5, 6, 9, 10, 11, 13, 15

Total Value 11, 13, 14, 15, 18, 19

Table 7—Nonmarket valuation methods used in economic 

studies of forest insect pests.

Nonmarket valuation 

method Study code

Contingent valuation 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 18

Contingent choice 17

Cost benefit 19

Hedonic property 1, 16, 20, 21, 22

Travel cost 3, 5, 6, 10

Other 2, 4

Nonmarket Valuation Methods Used

Table 7 shows the different types of nonmarket 

valuation methods used in the studies. Contingent 

valuation is the most commonly used method. It is the 

most versatile of the nonmarket valuation methods 

and can measure recreation, property, and aesthetic 

benefits. The travel cost method was used in four 

studies. The hedonic pricing method is used in five 

studies, all of which measure property value. Other 

methods used include contingent choice, cost benefit, and replacement and expenditure cost estimation 

methods. For further information about each of the 

nonmarket valuation methods please see Appendix A.

Forest Insect Impact Indicators Used

The visible effects of forest insect pests vary between species and the hosts on which they prey. The 

manner in which insects can damage a forest include 

dead and down trees, the density of the forest, and 

amount of visible damage. Table 8 shows that the 

most common insect impact indicators used in these 

studies are visible damage and number of trees. When 

insects attack trees, they damage and sometimes kill 

them, resulting in fewer trees per acre and, in the short 

term, increased evidence of damage (Rosenberger 

and Smith 1997). All of the impact indicators used 

are static, only considering forest conditions at a given point in time and excluding long-term effects and 

outcomes.
10 USDA Forest Service RMRS-GTR-275WWW. 2012.

estimated models for the relevant studies identify several indicators of pest impacts. These include number 

of trees per acre, percentage of visible damage (e.g., 

dead and down trees, defoliation rates, and discoloration of foliage), physical presence of insects, size of 

trees, and percentage of tree species composition. All 

indicators were found to be positively related to the 

benefits generated, with the exception of tree species 

composition, which may be either positively or negatively related. In other words, the negative impacts of 

pest infestations on the level of the indicator variables 

predominantly result in a decrease in benefit derived 

from the resource (or conversely, result in an increase 

in the level of damages).

While the literature provides useful nonmarket 

valuation data for forest management decision making in the United States, it is limited (see areas of 

future research in the next section). Constraints to the 

ultimate usefulness of the values found within the literature will be the comprehensiveness and quality of 

the body of literature (Johnston and Rosenberger 2010; 

Pendleton and others 2007). Collectively, the studies 

reviewed cover a wide range of forest pests, affected 

values (property, direct and indirect use, and passive 

use—bequest and existence—values), and use a variety of nonmarket valuation methods. However, many 

of the studies are concentrated in specific areas of the 

United States that do not reflect the wide range of the 

pests. Many of the studies are also dated, leading to 

concerns about the transferability of their estimates 

for current management and policy assessment. The 

context of the studies is also limited in that they deal 

with outbreak conditions of the various pests—pests 

as a natural forest disturbance are largely unexplored. 

Thus, while some generalizations may be supported by 

this literature, the age of some studies, spatial extent 

and intensities of disturbances evaluated, and the geographic location of studies may limit their general use 

in benefit-cost analyses. Furthermore, most studies do 

not suggest managerial responses to the disturbances 

or mitigation strategies to reduce the real and perceived 

damages caused by them or evaluate confounding factors such as climate change, fire, and development 

patterns. At best an analyst may find a single study or 

subset of studies that match well with the policy context being evaluated.

The mountain pine beetle is the most studied forest 

pest in the literature. Four of the mountain pine beetle 

studies also looked at the spruce budworm on four occasions. Studies that include the mountain pine beetle 

and other pests evaluated their effects on recreation 

(Loomis and Walsh 1988; Michalson 1975; Walsh and 

Olienyk 1981; Walsh and others 1989, 1990), property 

values (Price and others 2010; Walsh and others 1981a, 

b), passive use values, and total value (the sum of use 

and passive use values) (Walsh and others 1990). All 

but one of the mountain pine beetle studies (Michalson 

1975) were conducted on the Eastern Front Range of 

Colorado’s Rocky Mountains, despite the fact that their 

habitat ranges from Alaska and the Yukon Territory 

down to the southwestern United States (Berg and others 2006). The studies estimating the economic effects 

of mountain pine beetle on recreation all occur in wildland designated use areas and share the same affected 

stakeholders—recreators. Mountain pine beetle studies 

appear consistently in the literature with an increase 

during the late 1970s and early 1980s, due to increased 

interest of the USDA Forest Service.

The economic literature reveals that there is a negative relationship between the effects of forest pests 

and the quality and visitation rate for recreation. These 

negative effects are associated with visible damages 

(Haefele and others 1992; Holmes and Kramer 1996; 

Kramer and others 2003; Michalson 1975; Walsh and 

Olienyk 1981), tree density (Leuschner and Young 

1978; Loomis and Walsh 1988; Walsh and Olienyk 

1981; Walsh and others 1989, 1990; Wickman and 

Renton 1975), and tree size (Loomis and Walsh 1988; 

Walsh and Olienyk 1981). Pest impacts on recreation 

lead to a reduction in the quality of the recreation experience measured through decreased consumer surplus, 

but also through a decrease in the number of visits.

Pests kill or cause visible damage to trees, such as 

color change or defoliation. Residential properties are 

visually affected by mountain pine beetle and other 

pests in the near and far view, which has an effect on 

the satisfaction of owning and living on the property in 

the short run. This change in satisfaction is reflected in 

the property’s value (Holmes and others 2006; Huggett 

and others 2008; Price and others 2010; Walsh and others 1981a). Forest pests are associated with decreases 

in property value (both developed and undeveloped). 

Healthy trees add positive value to a property through 

aesthetic value, ecosystem services, and increased 

owner satisfaction (Huggett and others 2008; Price and 

others 2010). Trees are so important to a property’s 

value that homeowners are willing to pay to protect 

the trees from pests on their property and in the viewshed of their homes (Jakus and Smith 1991; Miller and 

Lindsay 1993; Payne and others 1973; Price and others 

2010; Walsh and others 1981a, b).

The literature also shows that nonuse or passive-use 

benefits are more than three-and-a-half times greater 

than recreation-use benefits (Holmes and Kramer 1996; 
USDA Forest Service RMRS-GTR-275WWW. 2012. 11

Kramer and others 2003; Walsh and others 1990). 

Walsh and others (1990) emphasize the importance 

of measuring passive use values when calculating the 

total value of forest ecosystem services. Without the 

inclusion of passive use values, an economic assessment for management or policy would understate the 

true value of a forest and its realized ecosystem services. Without adequate information, a sub-optimal 

conclusion or decision could be reached.

Other forest pests identified in this review (Douglas 

fir tussock moth, southern pine beetle, Nantucket pine 

tip moth, and the Hemlock wooly adelgid) were not 

represented enough by the literature to draw conclusions or make comparisons beyond the individual 

articles, although the same general trends and conclusions of the broader literature are supported by them 

(see Appendix B for the summaries of the articles).

Conclusions and Areas of Future 

Research

This literature review shows evidence that insects 

cause significant economic damage beyond the damage to market commodities, at least in the short term. 

However, estimates of potential economic damages 

due to pest outbreaks reported in this literature are 

mostly site-specific and species-specific, providing a 

thumbnail sketch of the possible benefits from control 

programs or policies. The transferability of the economic measures and models are contingent on the context 

of these original studies and their correspondence with 

characteristics of the target site or policy in a benefit 

transfer (Johnston and Rosenberger 2010; Rosenberger 

and Loomis 2003; Rosenberger and Phipps 2007). 

Further research in the area of the economic impacts of 

insects and other disturbance agents on the productive 

capability and sustainability of different environmental 

resources or areas will add to the stock of knowledge 

and help guide future decisions and policies.

Confidence in our ability to transfer the stock 

of knowledge may decay over time. As noted by 

Pendleton and others (2007), “for values to be relevant to current policy-making, they need to reflect 

current estimates of nonmarket values” (p. 370). The 

economic valuation literature on the effects of forest 

pests has an equally distributed publication rate between 1973 and 2010. However, mountain pine beetle 

valuation studies peaked during the 1980s, with most 

estimates being at least 10 years old. Spruce budworm 

studies also peaked in the 1980s and have since only 

been studied by Haefele and Loomis (2001). Studies 

valuing the effects of the gypsy moth dropped off in the 

1980s and 2000s, with the last study occurring in 1993. 

The first of the balsam wooly adelgid valuation studies 

was reported in 1992 (Haefele and others 1992) and 

there have only been two studies reported since then. 

The literature is thin for the economic effects of insects 

such as the Douglas-fir tussock moth, southern pine 

beetle, Nantucket pine tip moth, and hemlock wooly 

adelgid. This implies that any attempt to use benefit 

transfer in valuing the current economic effects of forest pests would potentially rely on older information. 

Since methods for nonmarket valuation have been critiqued and updated, stakeholder preferences may have 

changed, and the scale and intensity of outbreaks may 

have increased over time, dependence on older data 

may affect, whether real or perceived, the accuracy and 

relevance of values obtained through benefit transfer 

(Johnston and Rosenberger 2010; Pendleton and others 

2007). Therefore, not only do we need to expand our 

stock of knowledge through new primary research, we 

also need to replicate or verify older results.

All species of forest pests have long histories of interaction with their environments (Logan and others 

2003). Still, little is known about how stakeholders 

perceive forest pest outbreaks based on their prior 

knowledge of historic and natural patterns of pest damages, and whether damage levels are based on human 

or natural disturbances. Information could include a 

general history of the insect affecting the area; the role 

the insect plays in the functioning of the ecosystem; 

and human actions that affect the extent and intensity 

of an outbreak. There is also a need to research whether 

this information changes people’s attitudes toward pest 

outbreaks and the amounts people are willing to pay 

to avoid or mitigate them. Furthermore, stakeholders’ 

attitudes toward different management strategies and 

their appreciation of derived ecosystem services may 

directly affect their willingness to pay for pest related 

programs and policies.

Most of the reviewed valuation studies are static, 

reflecting a point in time. An issue in need of further inquiry is the role static measures of economic damages 

may have in a larger, dynamic ecosystem management 

context. Static economic analysis does not estimate 

the economic worth of natural processes or ecosystem 

functions that define healthy forests and ecosystems. 

However, when management objectives converge 

(ecological, economic, and social), static measures 

may themselves be indicators of the human component 

of forest health management.

Most of the studies included in this review gather data and generate estimates for relatively small 
12 USDA Forest Service RMRS-GTR-275WWW. 2012.

geographical areas. The range of many forest pests 

extends well past the study areas in the literature. For 

example, the mountain pine beetle can be found from 

Alaska all the way to the southwestern United States, 

yet the literature is concentrated on the Colorado Front 

Range of the Rocky Mountains (Walsh and Olienyk 

1981; Walsh and others 1981a, b, 1989, 1990; Loomis 

and Walsh 1988; Price and others 2010). There are 

still many areas affected by mountain pine beetle and 

other pests that remain unstudied. Given this discrepancy, there is a need for nonmarket valuation studies 

to be done on broad spatial scales (i.e., over the entire 

range of a pest species). If studies were conducted on a 

broader scale, the estimates would be more appropriate 

for policy and management scale decision making.

Furthermore, scientific understanding of the effects of forest pests could benefit from further study 

of the spatial and temporal dimensions of pest outbreaks. Knowledge of the extent of an outbreak as well 

as the time scale over which the outbreak will affect 

forest ecosystem functions and services can improve 

economic estimates and policy decision making. In 

particular, the studies listed in this review provide site 

specific data and estimates, while policy making often 

occurs on a regional, state, or national scale, and is in 

effect for a number of years.

The studies in this review have valued forest pest 

outbreaks in urban (Holmes and others 2006; Huggett 

and others 2008), wildland (Asaro and others 2006; 

Haefele and Loomis 2001; Kramer and others 2003), 

and wildland-urban interface settings (Price and others 

2010; Thompson and others 1999). Still, it is unknown 

whether peoples’ willingness to pay and support management alternatives changes based on the type of land 

use at the location of the outbreak. Wildland forest pest 

outbreaks affect ecosystem functions and services differently than wildland-urban interface outbreaks or 

urban outbreaks. Thus, it is expected that people value 

the effects of the outbreaks differently. The issue then 

becomes identifying what people are willing to pay to 

avoid the same forest pest outbreak (identical in severity, spatial, and temporal scale) in the three land use 

designations and comparing the results.

The abundance of mature trees plays a large role in 

the ability of mountain pine beetle and other forest pests 

to reach outbreak levels (Berg and others 2006). Thus, 

any measures that forest and property managers take to 

maintain their properties are likely to affect mountain 

pine beetle and other pest populations. Catastrophic 

pest outbreaks in the Colorado Front Range (Price and 

others 2010) and elsewhere over the past three decades 

have forced some urgency among decision makers, 

scientists, and the general public to deal with the changes in ecosystem services (Rosner 2009; Spyratos and 

others 2004). The literature to date weakly addresses 

the use of adaptive management (i.e. silviculture, stand 

rotation, and age composition) to control for or lessen 

the probability of pest outbreaks’ scales and intensities. A comprehensive understanding of the relative 

influence of host species and climate on pest outbreaks 

over homogeneous regions is necessary to predict how 

frequently and with what severity pest outbreaks will 

occur. Lessons can be learned from the literature on 

fire and adopted prevention and mitigation strategies 

in each land use classification. For example, fire spread 

models using housing and vegetation data have been 

used to predict fire size and probability distributions 

(Spyratos and others 2004), and ‘at risk’ houses and 

communities have been targeted by informational campaigns to reduce or minimize risks to property through 

fire-resistant landscaping and construction materials. 

Thus, it seems reasonable that similar models and management strategies could be developed for forest pests.

Every pest outbreak has many contributing factors. 

Some of the factors can be controlled by human intervention while others are controlled purely by ecosystem 

functions. Therefore, there exist elements of uncertainty 

and risk in the management of forest ecosystems. Risk 

and uncertainty of events occurring, and their relative 

spatial and temporal impacts, need to be better understood in the case of forest pests. Scientific measures of 

risk and lay perceptions of risk often diverge, which 

is why it is important to inform decision makers and 

the public of the risk and uncertainty of potential forest 

pest outbreaks including likelihoods, confidences, and 

ranges of uncertainty. Better means of reporting and 

communicating actual risk levels can help inform the 

voting public as well as influence socially constructed 

perceptions of risk (Rosenberger 2006).

This review was restricted to forest insect pests due 

to the limited focus of nonmarket valuation studies on 

diseases and pathogens—notable exceptions include 

Kovacs and others (2011) and Meldrum and others 

(2011). It should not be construed that diseases and 

pathogens are less important or result in lower damages 

than forest insect pests. Forest diseases and pathogens 

as disturbance agents may result in similar physical 

damages to forest ecosystems. Thus, until primary 

valuation research focuses on diseases and pathogens, 

the valuation literature on forest insect pests, as reviewed here, may be used to inform forest policy and 

management of disease and pathogen prevention and 

mitigation—although the validity of such transfers of 

information remains an empirical question.
USDA Forest Service RMRS-GTR-275WWW. 2012. 13

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16 USDA Forest Service RMRS-GTR-275WWW. 2012.

The supply of ecosystem goods and services has declined, while the demand for them has grown over the 

past half-century. These trends are largely driven by 

land use and land cover changes to meet the needs of 

an increasing population, and an emergence of a greater understanding and appreciation of ecosystem goods 

and services. Concurrent with this trend has been the 

development of nonmarket valuation techniques for 

quantifying the benefits of ecosystem goods and services. The economic value of an environmental resource 

is defined as the most an individual would be willing 

to pay in order to obtain that good, service, or state 

of the world (King and Mazzotta 2000). By aggregating individual values, social worth can be calculated. A 

person’s willingness to pay, usually measured in dollars, reveals how much a person is willing to give up 

in other goods and services in order to gain a specific 

change in quantity or quality of another good or service (King and Mazzotta 2000; Rosenberger and Smith 

1997). Total willingness to pay is the amount actually 

paid for the good or service plus the additional amount 

a person would be willing to pay for it (also known as 

consumer surplus). Net willingness to pay is equal to 

the total willingness to pay less the amount actually 

paid for the good or service. Marginal willingness to 

pay is the amount a person will pay for the last unit 

purchased of a good or service. All of the economic 

nonmarket valuation methods used in the studies presented in this document—travel cost, hedonic pricing, 

contingent valuation and contingent choice methods—

are derived from consumer theory (Champ and others 

2003).

Travel Cost Method

The travel cost method is a valuation approach that 

uses variations in the costs of travel and other expenditures as implicit prices of destination sites in order to 

estimate the demand for the site. This method is typically used to estimate the onsite benefits of particular 

sites. It indirectly estimates the economic worth of a 

nonmarket resource by first defining the demand for 

the resource as a function of travel costs. Distance 

is an important factor in defining the demand curve. 

Travel costs are, in part, the variable costs of the trip. 

Therefore, the farther individuals are from the site, the 

more they pay in travel costs to the site, and in general, 

the fewer trips they take to the site. Different resource 

conditions (i.e., forest health levels) will result in shifts 

in the demand function for the resource. Economic 

worth of the resource change is measured as consumer 

surplus, which is equivalent to net willingness to pay. 

Consumer surplus is the amount of benefit gained from 

the purchase of a good or service beyond what was actually paid (entrance fees, travel costs) and is usually 

measured in monetary units.

Changes in forest health caused by pests are likely to 

shift the demand for recreation at the site, thus affecting the overall benefits derived from the experience. 

Two basic versions of the travel cost model are the individual and the zonal method. The individual travel 

cost method defines the number of visits to a site for 

a given time period for an individual. The zonal travel 

cost method creates a set of zones from which visitors 

originate, and then defines the visitation rate from the 

different zones (where visitation rate is the number of 

visits from a zone divided by the population of that 

zone). For more detailed discussions concerning the 

travel cost method, see Rosenthal and others (1984), 

Loomis and Walsh (1997), Champ and others (2003), 

and King and Mazzotta (2000).

Hedonic Pricing Method

The hedonic pricing method is another indirect estimation technique used in the economic valuation of 

nonmarket resources. This method estimates economic 

worth as a hedonic price, or the worth of an attribute 

as it is associated with the overall market price of a 

multi-attribute good such as a house or parcel of land. 

It is based on the variation in selling prices in an actual 

market and assumes that these variations are correlated 

with the presence of differing levels of specific attributes. For example, the price of a house may be based 

on the number of rooms, location, nearness to open 

space or public facilities, proximity of forests, and the 

like.

Hedonic pricing assumes that consumers choose 

market goods based on certain identifiable characteristics or attributes. It views any good as a bundle of 

attributes, each attribute contributing to the overall 

market worth of the good. Hedonic pricing statistically 

determines the marginal contribution of an attribute to 

the overall benefit of owning a good having the attribute by means of a two-stage process. Usually it relies 

on a sufficient number of sales transactions in order 

Appendix A: Economic Nonmarket Valuation Methods
USDA Forest Service RMRS-GTR-275WWW. 2012. 17

to allocate worth to specific attributes. For instance, 

assume there are two residences identical in all attributes except one: forest quality. If the residence with a 

preferred forest characteristic costs $X more than the 

other residence, then the forest attribute can be allocated a worth of $X. This is the implicit price paid for the 

attribute in the first stage of the analysis. In the second 

stage, the implicit price, along with other relevant information (such as the quality of the surrounding forest 

and socioeconomic variables) is used to estimate the 

demand for the attribute. Economic worth of the attribute is calculated as the area under the demand curve 

and above the implicit price line. The impact of pestcaused changes in forest health would be the reduced 

benefit derived from owning a good with forest healthdependent attributes. For more detailed discussions 

concerning the hedonic pricing method, see Freeman 

(1979), Brookshire and others (1982), Mendelsohn and 

Markstrom (1988), and Champ and others (2003).

Contingent Valuation Method

The contingent valuation method is a direct estimation method based on intended or stated behavior. 

This method asks individuals for their values (usually 

in monetary units) for defined changes in the quantity 

or quality of a good or service. Contingent valuation 

directly estimates economic worth as willingness to 

pay or compensation due by surveying or interviewing 

individuals. Contingent valuation constructs a hypothetical market in which the quantity and/or quality 

of a nonmarket resource is varied or changed, for example, forest conditions. Thus, the individual bids for 

the resource in a hypothetical market is contingent on 

the changes in the resource. The contingent valuation 

method assumes the individual can rationally express 

the economic worth of a nonmarket resource in this 

manner and that the individual’s expressions are accurately elicited by the hypothetical situation.

Some concerns about the empirical application of 

this method have been raised, and procedural methods 

have been published to make its application more consistent (Arrow and others 1993; U.S. Water Resources 

Council 1983). Some of the concerns raised include 

many potential sources of bias in the results, such as 

interest, interviewer, and strategic biases. Another 

concern is the proper amount of information to be included in the survey and the best way to convey this 

information. The choice of the proper payment vehicle 

(taxes, donations, and the like) has also led to numerous arguments. Yet another concern is what the proper 

elicitation method should be. Some of the elicitation 

methods used include payment card, open-ended, dichotomous or discrete choice, and iterative bidding 

methods. Many concerns about these issues can be 

overcome with proper survey design. For more detailed discussions concerning the contingent valuation 

method, see Mitchell and Carson (1989), Loomis and 

Walsh (1997), and Champ and others (2003).

Contingent Choice Method

The contingent choice method, like contingent 

valuation, is used to estimate the economic value of 

ecosystems and environmental services through stated 

preference. This method can estimate use and passiveuse values (including option, existence, and bequest 

values) by analyzing the choices people make when 

asked about a hypothetical scenario. The hypothetical 

scenario is carefully constructed by the researchers and 

the questions asked elicit choices or tradeoffs between 

different amenities, such as aesthetic quality, recreation 

opportunities, and environmental quality, described in 

terms of its characteristics or level of attributes.

Sometimes referred to as conjoint analysis, contingent choice was developed to measure preferences for 

different characteristics or attributes of a multi-attribute 

choice. This method assumes that choices are made up 

of many attributes, including price, and that an individual can rank or choose between varying levels or 

amounts of each attribute. If price is included as one of 

the attributes of the good, then willingness to pay for 

changes in the attributes can be calculated as the tradeoff between a resource level or condition and income 

(i.e., money). Because the contingent choice method 

can value actions as a whole, as well as the individual 

parts of an action, it is very compatible with the policy 

decision-making process, especially when the decision 

being made impacts a natural resource or ecosystem 

service. For more information on the contingent choice 

method, see Haefele and Loomis (2001), King and 

Mazzotta (2000), and Champ and others (2003).
18 USDA Forest Service RMRS-GTR-275WWW. 2012.

This appendix includes extended summaries 

of reviewed studies that are either excerpted from 

Rosenberger and Smith (1997) (studies #1-15, which 

are direct quotes) or are new summaries of recently 

added studies (#16-22). NOTE: The economic values 

reported in the summaries of the studies are all given 

in the dollar value from the year of publication. Some 

of the estimates in a particular study are based on the 

worth of the property at the time of the study; therefore, 

it may not be correct to assume that property values 

have increased at the same rate as the price index.

1. Payne and others 1973. Residential property in 

the Northeast and the Gypsy Moth 

(Appendix Table 1)

Payne and others (1973) estimate the gypsy moth’s 

impact on residential property value in the northeastern United States. Gypsy moths are most destructive 

in residential areas where the worth of trees for conversion to wood products is greatly exceeded by the 

amenity benefits produced by the trees. Federal, state, 

and local agencies need estimates for the impacts of 

gypsy moths on the residential property in order to 

improve decisions on controlling gypsy moths. The 

authors present a method for estimating the losses in 

residential property values due to gypsy moths.

This study uses the hedonic pricing method to determine the contributed worth of trees to residential 

property where the trees are not normally separable 

from the land parcel itself. The amenity benefits of 

trees for property owners include shade, microclimatic 

effects, and aesthetics, and are reflected in the market 

price of the property. A gypsy moth attack, through 

repeated defoliation, can kill the tree and completely 

eliminate the production of its amenity benefits until a 

different tree has matured to the point of total replacement for the lost tree. The authors test the Amherst 

model by applying it in a similar environment: 

Stroudsburg, Pennsylvania. The data include the fair 

market value of the parcel, the size of the parcel, the 

number of trees [≥6 inches diameter at breast height 

(dbh)], and an estimate of the level of tree mortality associated with a given level of insect infestation.

In the pre-attack scenario (with a gypsy moth control 

program of 100 percent effectiveness), it is estimated 

that the contributed worth of trees to residential property 

is $7,767/acre with 29 trees/acre; or about $270/tree. 

Incremental per tree benefits represent diminishing 

returns per tree. Beyond this level of 29 trees/acre, 

each incremental tree adds less to the property value 

(up to the observed maximum of 50 trees per acre in 

the sample). The average arc elasticity of demand for 

trees on residential property is 0.24, meaning that a 

0.24-percent reduction in the contributed worth of 

trees to residential property results from a 1-percent 

decrease in the number of trees 6 inches dbh.

In the post-attack period (without a gypsy moth control program), the loss in property value is equal to the 

predicted number of trees killed times the estimated 

per-tree worth, according to this study’s estimates. The 

net worth of the change in property value after attack 

by gypsy moths is the difference between the preattack and post-attack estimates. Therefore, a gypsy 

moth attack with a 15-percent mortality rate (29 trees 

per acre to 24.65 trees per acre) results in a loss of approximately $1,175/acre. The estimated worth is only 

for the benefits accruing to the onsite property owners. 

Benefits not measured are the offsite values accruing to the general population (neighbors, passers-by). 

Impacts not accounted for include non-mortality effects like discoloration and defoliation of trees, and 

the unpleasant effects of the presence of moths (caterpillars, feces, cocoons, allergic reactions to moths). 

Other losses associated with pest infestations include 

the removal and replacement costs of dead trees, and 

the costs of control. The model used is applicable only 

to areas similar to the two study areas.

2. Wickman and Renton 1975. Esthetics at the 

Stowe Reservoir Campground in California and 

the Douglas-fir Tussock Moth (Appendix Table 2)

Wickman and Renton (1975) estimate the total loss of recreation benefits of camping at a Forest 

Service campground at Stowe Reservoir in the Warner 

Mountains, Modoc National Forest, California, caused 

by the Douglas-fir tussock moth infestation. The moth 

can cause heavy defoliation of white fir, resulting in 

tree mortality and top-kill. This damage can have a 

significant impact on the recreation benefits at specific 

sites by reducing the amount of shade, aesthetic quality, and privacy screening. The authors estimate the 

Appendix B: Extended Summaries of Studies
USDA Forest Service RMRS-GTR-275WWW. 2012. 19

insect damages by adding the actual costs of clean-up 

to a calculated unit worth of trees as aesthetic value.

The aesthetic worth component of trees in the campground is equivalent to the total replacement costs of 

the campground. With 46 trees on each of eight camp 

units, the aesthetic value of the campground based 

on estimated replacement costs is $20,610 (about 

$2,576 per camp unit or $56 per tree). The actual cost 

of cleanup (felling, removal, and topping of affected 

trees) is estimated to be $324 for the campground with 

25 trees killed due to insect infestation. The total loss 

in campground worth if 25 trees are killed is estimated 

to be about $1,725 (total aesthetic damage plus cleanup 

costs), or about $216 per camp unit.

The method employed in this study may be sufficient to estimate nonmarket benefits if the economic 

evaluation is concerned with cost-minimization or 

cost savings approaches on the public good supply 

side. However, on the demand side, the manager may 

be more interested in the benefits generated by the resource (in this study, the camp unit with pre-infestation 

characteristics). The actual and replacement cost valuation approach may not adequately estimate nonmarket 

benefits (Loomis 1993). Total replacement costs of a 

camp unit may not be a good proxy for the total worth 

of the unit if it does not account for potentially high 

benefits generated by the unit (aesthetic value). The 

replacement costs also may not be feasible for a 60- 

to 70-year-old stand of white fir. If anything, the loss 

of nonmarket benefits will continue to accrue until replacement trees grow to sufficient size, mitigating the 

damage caused by the insects.

3. Michalson 1975. Recreationists in the Targhee 

National Forest and the Mountain Pine Beetle 

(Appendix Table 3)

Michalson (1975) estimates the impact of the mountain pine beetle on the benefits of recreation in the 

Targhee National Forest in eastern Idaho. Mountain 

pine beetle infestation in the predominantly lodgepole 

pine forested area affects recreation by killing trees, 

thus reducing aesthetics in the short run. This study 

estimates the impact on recreation of the increased 

presence of dead trees caused by a mountain pine beetle infestation. The purpose of this study is to estimate 

recreation losses, allowing the decision maker to determine the amount of investment needed, if a control 

program is to be implemented.

The author estimates the losses to recreation in the 

study area by means of the travel cost method, using expenditure and visitor-day loss calculations. He 

calculates the impact of the beetles by estimating the 

consumer surplus and expenditure per visitor day, 

and the number of visitor days for campgrounds with 

>30-percent infestation and for campgrounds with 

<30-percent infestation. The study’s hypothesis is 

that the difference between these estimates equals the 

amount of recreation loss, or economic impact, associated with the mountain pine beetle damage. Although, 

as discussed earlier, expenditure is not a good measure 

of economic loss, it is a helpful measure if a cost-minimization approach is chosen.

Michalson (1975) estimates that a scenario without mountain pine beetle infestation generated $30.49 

in average consumer surplus per visitor day, per person, with each visitor spending on average $5.28 per 

visitor day and staying approximately 3.3 visitor days 

per person per visit. The estimate for a scenario with 

mountain pine beetle infestation is $26.40 in average 

consumer surplus per visitor day, per person, with 

each visitor spending on average $4.85 per visitor day 

and staying approximately 2.1 visitor days per visit. 

The difference between the estimates for the scenario 

without infestation and those for the scenario with infestation is the economic impact of a mountain pine 

beetle infestation. These impact estimates, on average, 

are a loss of $4.09 in consumer surplus per visitor day 

per person, a reduction in the amount spent per visitor day per person of $0.43, and a reduction in length 

of stay per visit of 1.2 visitor days per person. Based 

on an estimated 124,783 visitor days per year (in the 

early 1970’s), there is an estimated loss of $510,362 

in consumer surplus per year in the Targhee National 

Forest, and a loss in local expenditures of $53,657 per 

year with the level of damage at the time of the study.

4. Moeller and others 1977. Homeowners and 

Recreation Area Managers in the Northeast and 

the Gypsy Moth (Appendix Table 4)

Moeller and others (1977) estimate the gypsy 

moth’s impact on homeowners and managers of recreation areas as control costs, financial losses, and lost 

recreational use. The authors identify five ownership 

classes: (1) homeowners using public control methods, 

(2) homeowners using commercial control methods, 

(3) commercial campgrounds, (4) quasi-public recreation areas, and (5) public recreation areas. Federal, 

state, and local agencies need estimates of the gypsy 

moth’s impact on the economic and ownership objectives of the different ownership classes. Decision 

makers can use the information in the design, 
20 USDA Forest Service RMRS-GTR-275WWW. 2012.

implementation, and coordination of gypsy moth control programs.

Gypsy moth infestations can affect specific objectives of the owner/manager of a property. The authors 

interviewed 540 homeowners and 170 managers of 

recreation areas in Pennsylvania and New York in 

1973. The authors identify four objectives for each 

ownership category that can be affected by gypsy 

moths. Homeowner objectives, excluding the need 

for a place of residence, include (1) the enjoyment of 

natural beauty, (2) backyard recreation, (3) property 

value, and (4) the maximization of recreation use. The 

study identifies the following management objectives 

for managers of recreation areas: (1) the maximization 

of recreation revenue, (2) the maximization of property value, (3) the maximization of the enjoyment of 

natural beauty, and (4) the maximization of recreation 

use. The authors identify four possible effects gypsy 

moth infestations can have on the ownership objectives: (1) nuisance (presence of insects, feces, and egg 

masses), (2) defoliation of trees and shrubs (reducing the shade and aesthetic quality of the property), 

(3) mortality (the killing of trees by the moths), and 

(4) other (allergic reactions to the moths and the like).

Calculations of important indices provide a measure of the relative importance of the impact of 

moths on a specific ownership objective. The study 

found that the nuisance effect affected the enjoyment of natural beauty and backyard recreation the 

most for homeowners, regardless of whether public 

or commercial control methods were employed. The 

nuisance effect of a gypsy moth infestation also affects the enjoyment of natural beauty in recreation 

areas the most, in the opinion of managers of commercial campgrounds and managers of quasi-public 

recreation areas (such as land owned and operated 

by the Boy Scouts organization). Managers of public recreation areas believed that the maximization of 

recreation revenue and enjoyment of natural beauty 

are affected most by the nuisance effect associated 

with a gypsy moth infestation. The only other effect 

that shows significant impacts on specific management objectives is defoliation.

The authors also report financial information on 

the control costs of a gypsy moth infestation, as well 

as financial losses and economic information on recreation losses for the different ownership classes 

attributable to the infestation. Control costs represent 

an economic measure of the importance owners place 

on goods and services and include what the owners 

actually spend on gypsy moth control programs, including the cost of equipment, materials, services, 

and the owners’ own labor input. This study assigns 

labor a worth of $2 (in 1977 dollars) per hour in moth 

control. Homeowners who participate in a public control program spend on average $102 per year, whereas 

those who participate in commercial control methods 

spend on average $240 per year. Managers of recreation areas spend $441 on average for commercial 

campgrounds and $722 per year for quasi-public recreation areas in control costs. No data were collected 

for managers of public recreation areas for either control costs or financial losses.

Financial losses are another measure of the impacts 

of gypsy moths on property through the capital cost 

reduction in property value and the increase in maintenance costs and revenue losses. Homeowners who 

participate in public control programs report $125 in 

financial losses per year on average, whereas those 

who participate in commercial control programs report losses of $479 per year on average. Managers 

of recreation areas report financial losses of $249 per 

year for the average commercial campground operation, and $996 per year for the average quasi-public 

recreation area.

Effects of gypsy moth infestations can alter the 

recreation benefits derived from private and public 

property. The economic effects of a moth infestation 

on recreation are not included in the above estimates. 

Recreation use losses in the different ownership 

classes are estimated as the number of person-days of 

recreation use lost per year. Homeowners with public 

controls report a loss of 108 person-days in recreation 

use per year on average, whereas homeowners with 

commercial controls report an average recreation use 

loss of 133 person-days per year. Managers of recreation areas report larger impacts on recreation use 

than homeowners. Managers of commercial campgrounds report an average of 161 lost person-days 

of recreation use per year. Managers of quasi-public 

campgrounds report an average recreation use loss 

of 240 person-days per year. Managers of public 

recreation areas report an average loss of 36,660 person-days per year.

This study ranks the relative effects of a gypsy 

moth infestation on the different ownership/management objectives. It estimates financial as well 

as economic measures of gypsy moth impacts. It 

measures the economic losses of recreation use of 

property in person-days, which can be converted to a 

commensurable dollar metric if the dollar worth of a 

person-day in recreation use is known. This is the first 

study to address the direct impacts of the presence of 

gypsy moths through the nuisance effect. Most studies 
USDA Forest Service RMRS-GTR-275WWW. 2012. 21

estimate the secondary effects of a pest infestation, 

such as tree mortality, defoliation, and discoloration, 

which result in reduced recreation quality, aesthetic or 

scenic quality, property value, and other amenity benefits produced by trees or forests, ignoring the direct 

effects the presence of insects may have on benefits.

5. Leuschner and Young 1978. Recreation at East 

Texas Reservoir Campsites and the Southern Pine 

Beetle (Appendix Table 5)

Leuschner and Young (1978) estimate the southern pine beetle’s impact on recreation use of reservoir 

campsites in east Texas, where beetles kill patches of 

trees near the reservoirs. This affects many different 

forest products, including the recreation benefits of the 

surrounding campgrounds. To deal with these effects, 

forest managers need to be able to quantitatively evaluate pest control programs. One method of quantitative 

analysis is through the use of benefit-cost analysis. In 

order to use benefit cost analysis, all relevant values 

must be measured and included. Recreation benefit 

is negatively affected because the beetle-killed trees 

reduce the shade available and the number of living 

trees in campsites. Normally, two reactions will be 

forthcoming following a beetle infestation: (1) the recreationists will continue to use the site but at a reduced 

enjoyment level; or (2) the recreationists will substitute 

unaffected sites for their recreation outings. The authors report that they do not attempt to estimate the first 

reaction because they lack a state-of-the-art method for 

estimating this form of a recreation impact.

The authors estimate the demand functions for two 

types of campgrounds on the basis of secondary data 

collected by the managing agencies. The two managing agencies are the USDA Forest Service (FS) and 

the U.S. Army Corps of Engineers (COE). Seven FS 

and 12 COE campgrounds are included in the study. 

The impact indicator variable is the percentage of 

pine crown cover, estimated from aerial photos taken 

in 1969 (black and white photos) and in 1970 (color 

photos). Secondary data on recreation use collected by 

the managing agencies on site are used to estimate the 

recreation demand for campgrounds (based, in part, on 

the percentage of pine crown cover) through the use of 

the zonal travel cost method. The unaffected recreation 

benefit is estimated as the area under the derived demand curve. By changing the percentage of pine crown 

cover in the derived demand functions for recreation at 

different campgrounds to simulate beetle infestations, 

the authors were able to predict the impact of a beetle 

infestation on the recreation benefit at the site. They 

estimate total recreation benefit for the campgrounds 

included in the study as $12,350,800 to $19,889,600, 

depending on assumptions about the worth of travel time to the recreation site. The smaller amount is 

when travel time costs are not included, and the larger 

amount is when a positive travel time cost is allocated 

on the basis of a methodology current at the time of the 

study (Cesario 1976).

The recreation damages incurred from a beetle infestation are calculated for each of the campgrounds in 

the study. Aggregate impacts cannot be calculated because (1) unaffected campgrounds are substituted, by 

campers, in place of infested campgrounds, (2) some 

of the sites are not included in the simulated pest infestation, (3) the probability is low that all sites would be 

affected identically, and (4) there is no estimate for the 

decreased recreation benefit for those who continue to 

use the affected site. However, a rough aggregate estimate can be calculated assuming all sites are equally 

affected and no substitution occurs. Recreation benefits at FS campgrounds, with a 10-percent reduction 

in pine crown cover, are negatively impacted by $1.12 

per visit. With a 30-percent reduction in pine crown 

cover, recreation benefits decrease by $3.37 per visit. 

This results in an estimated recreation loss at FS campgrounds of approximately $287,400 with a 10-percent 

reduction in pine crown cover and $862,300 with a 

30-percent reduction. Recreation benefit at COE 

campgrounds with a 10-percent reduction in pine 

crown cover is negatively affected by $0.82 per visit. 

With a 30-percent reduction the decrease in benefit 

is $2.44 per visit. This results in an estimated loss 

at COE campgrounds of approximately $1,045,000 

with a 10-percent reduction in pine crown cover and 

$3,113,000 for a 30-percent reduction. A total loss of 

$1,332,400 in recreation benefit at east Texas reservoirs is estimated with a 10-percent reduction in pine 

crown cover. Estimated total loss with a 30-percent 

reduction is $3,975,300.

The authors also investigate the effect of substitution 

on the recreation loss of a simulated pest infestation at 

two campgrounds. Site-specific damage estimates are 

reduced by 85 to 90 percent when unaffected sites are 

substituted for the attacked site. However, the larger 

the affected area, the smaller this reduction is, because 

few or no unaffected substitute sites are available. The 

damages incurred from a beetle infestation are shortterm, but multi-period. These damages may eventually 

be mitigated through the natural regeneration of forest 

quality through regrowth, but during the replacement 

and regrowth periods, some positive level of recreation 

losses are realized.
22 USDA Forest Service RMRS-GTR-275WWW. 2012.

6. Walsh and Olienyk 1981. Recreation in the 

Colorado Front Range and the Mountain Pine 

Beetle (Appendix Table 6)

Walsh and Olienyk (1981) estimate the impacts 

of the mountain pine beetle on recreation demand in 

the Front Range of the Colorado Rocky Mountains. 

Recreation activities include developed camping, 

semi-developed camping, backpacking, hiking, fishing, picnicking, and using off-road vehicles (ORVs). 

Mountain pine beetles attack and kill ponderosa pines, 

resulting in the short-run discoloration of needles and 

dead and down trees that detract from the perceived 

quality of the forests. The long-run effect of a beetle 

infestation is a reduction in the density of the forest. 

Both the very short-run and the short-run effects on 

forest quality affect the demand for recreation use of 

these forests. The results of the study contributed to 

the assessment of a USDA Forest Service forest insect 

and disease management program including the assessment of forest insect control programs, and of citizen 

participation in management decisions and cost-sharing programs.

A stratified random sample of 435 recreation users 

was interviewed onsite at six different forest recreation sites in 1980. Using contingent valuation (with 

an iterative bidding technique) and individual travel 

cost methods, the authors estimate the worth of these 

beetle impacts on recreation demand as willingness to 

pay (in dollars) and willingness to participate (in user 

days). The beetle contingent changes in forest quality 

(depicted through the use of color photos) investigated 

by the authors include the following indicators: (1) the 

number of trees 6 inches in dbh or more on the site, on 

adjacent land affecting the near view, and on distant 

land affecting the far view, (2) the size of trees, (3) the 

presence of visible beetle damage, (4) the presence of 

dead and down trees, (5) the distribution of trees over 

the area (the presence of treeless patches caused by a 

beetle infestation), and (6) the presence of large specimen trees.

The authors estimate the average arc elasticities for 

aggregate recreation demand (excluding ORV use) in 

a 1- to 15-percent decrease from the predicted level of 

the indicator variable with a mean number of 178 trees 

per acre. The elasticities show that a 1-percent decrease 

in the number of live trees per acre onsite results in a 

0.28-percent decrease in recreation demand. A 1-percent decrease in the number of live trees on adjacent 

property affecting the near view results in a 0.25-percent decrease in the demand for recreation onsite. A 

1-percent decrease in the number of live trees on distant 

land affecting the far view results in a 0.16-percent decrease in the demand for recreation onsite. Recreation 

demand decreases by 0.32 percent with a 1-percent 

decrease in the average size of the trees surviving a 

beetle infestation (calculated in the 3-inch to 12-inch 

dbh range). Recreation demand decreases by 2.30 percent with either a 1-percent increase in visible damage 

such as needle discoloration or a 1-percent increase in 

the presence of dead and down trees with slash on the 

ground. A 1-percent increase in treeless areas caused 

by a beetle infestation results in a 0.24-percent decrease in the demand for recreation onsite. Recreation 

demand decreases by 2.20 percent with a 1-percent decrease in the presence of large specimen trees bigger 

than 24 inches dbh (this is approximately two specimen trees) at the recreation site. Evidently, recreation 

demand is more sensitive to visible damage and the 

presence of large trees than it is to the other factors.

Walsh and Olienyk (1981) estimate the loss in 

user days of recreation use for the Colorado Rocky 

Mountains Front Range as the result of a 15-percent 

effect on the following forest attributes by a beetle 

infestation. Aggregate recreation demand (excluding 

ORV use) decreases by 370,000 user days per year with 

a 15-percent reduction in the number of trees onsite; by 

330,000 user days per year with a 15-percent reduction in the number of trees on adjacent land; and by 

207,000 user days per year with a 15-percent reduction 

in the number of trees on distant land. A 15-percent 

reduction in the average size of the trees on the recreation site reduces demand by 422,000 user days per 

year. Either a 15-percent increase in the percentage of 

visible beetle damage or a 15-percent increase in the 

amount of dead and down trees decreases recreation 

demand by 3,045,000 user days per year. If 15 percent 

of the recreation site is a contiguous treeless area as the 

result of beetle infestations, recreation demand for the 

site decreases by 317,000 user days per year. A 1-percent decrease in the number of large specimen trees 

on the recreation site decreases recreation demand by 

192,700 user days per year. The authors also report the 

impacts of a beetle infestation on the demand for the 

individual recreation activities.

The authors also estimate the impact on consumer 

surplus per user day with a 15-percent reduction in the 

number of live trees 6 inches in dbh or more, per acre, 

by means of the contingent valuation method. They estimate a range of $1.50 to $1.70 per user day in lost 

consumer surplus, depending upon the initial number of trees per acre. The $1.50 is calculated for 178 

trees per acre, and the $1.70 is calculated for 270 trees 

per acre. Using the travel cost method of recreation 
USDA Forest Service RMRS-GTR-275WWW. 2012. 23

demand analysis, the authors also estimate the effect 

of a 15-percent decrease in the number of trees per 

acre on the number of trips to a recreation site in the 

Colorado Front Range per person per year, and on the 

consumer surplus per person per trip. The study found 

that a 15-percent decrease in the number of trees per 

acre results in 0.16 fewer trips per person per year and 

in a reduction in consumer surplus of $11.60 per person 

per year, or an average reduction of $1.75 in consumer 

surplus per person per trip.

To account for the natural recovery of a forest from 

an insect infestation, Walsh and Olienyk (1981) developed a regrowth model, which adjusts the losses over 

time to reflect the natural regenerative abilities of the 

forest. The losses estimated are per year and will continue to be realized for Colorado Front Range forests 

until replacement trees are of sufficient size and quality so that the original losses are completely offset. 

Benefits not included in the present study are the benefits of forest quality to the general public who may be 

willing to pay for the preservation of forest quality, for 

the option of future use of the forest, for the knowledge that forest quality exists and is protected, and for 

the satisfaction from the bequeathing of forests and 

forest quality to future generations. Other sources of 

value held by the general public include psychological 

and ecological values. The psychological and ecological benefits associated with forest health may be large 

enough to exceed the economic estimates listed in this 

study.

7. Walsh and others 1981a. Residential Property 

Owners in the Colorado Front Range and the 

Mountain Pine Beetle and Western Spruce 

Budworm (Appendix Table 7)

Walsh and others (1981a) estimate the impacts of the 

mountain pine beetle and the western spruce budworm 

on the contributed worth of trees to residential property 

in the Front Range of the Colorado Rocky Mountains. 

Trees provide shade, aesthetic quality, wildlife habitat, 

privacy, and other amenity benefits to the owners of 

property. Mountain pine beetles attack and either kill or 

cause visible damage to ponderosa pine trees. Western 

spruce budworms attack Douglas-fir trees, causing extensive visible damage, but rarely kill the trees. Insect 

infestations that kill or cause visible damage to trees 

near residential mountain properties have an effect 

on the satisfaction derived from owning and living on 

mountain property, which is reflected in the property 

value. The study was conducted to develop and apply 

a procedure for measuring the effect of mountain pine 

beetle and western spruce budworm infestations on the 

worth of trees to owners of residential property in the 

Front Range of the Colorado Rocky Mountains. The 

results of the study contributed to the assessment of a 

USDA Forest Service forest insect and disease management program including the assessment of forest 

insect control programs, and of citizen participation in 

management decisions and cost-sharing programs.

A representative sample of 64 mountain homeowners was interviewed at five different study sites along 

the Front Range of the Colorado Rocky Mountains in 

1980. Using the contingent valuation method (with an 

iterative bidding technique), Walsh and others (1981a) 

estimated the insect impacts on the contributed worth 

of trees to mountain residential property as the owners’ 

willingness to pay for different levels of forest quality. The contingent changes in forest quality caused by 

insect infestations investigated by the authors and depicted in color photos include (1) the number of trees 

6 inches in dbh or more on the residential property and 

on adjacent property in the near view, (2) the size of 

the trees on the property, (3) an expert expectation of 

a severe insect infestation, (4) the presence of visible 

tree damage, (5) the distribution of ponderosa pine 

and Douglas-fir on the property, (6) the distribution of 

trees over the property (the presence of treeless patches 

caused by an insect infestation), and (7) the presence 

of large specimen trees. The study divides mountain 

properties into improved lots (lots where a mountain 

home has been constructed) and unimproved lots (plotted lots where a subdivision has been filed but where 

no mountain homes have been constructed).

The authors estimate the average arc elasticities 

for the contributed worth of trees to mountain properties in a 1- to 15-percent range decrease from the 

predicted optimal level of the indicator variable with 

a mean number of 212 trees per acre. The elasticities 

show that a 1-percent decrease in the number of trees 

6 inches in dbh or more on the property results in a 

0.34-percent decrease in the contributed worth of the 

trees to improved lots and a 0.28-percent decrease for 

unimproved lots. A 1-percent decrease in the number 

of trees on property adjacent to improved lots affecting the near view decreases the worth of the improved 

lots by 0.20 percent. The worth of improved and unimproved lots decreases by 0.35 percent and 0.33 percent, 

respectively, with a 1-percent decrease in the average 

size of the trees surviving a beetle infestation on the 

lot (calculated in the 3-inch to 12-inch dbh range). The 

worth of improved lots decreases by 0.76 percent and 

the worth of unimproved lots decreases by 0.61 percent 

with a 1-percent increase in an expert expectation of 
24 USDA Forest Service RMRS-GTR-275WWW. 2012.

insect damage to trees on the lot. A 1-percent increase 

in visible damage caused by an insect infestation results in a 2.27-percent decrease in improved lot worth 

and a 1.80-percent decrease for unimproved lots. A 

1-percent increase in treeless areas caused by insects 

results in a 0.29-percent decrease in improved lot worth 

and a 0.40-percent decrease in unimproved lot worth. 

The worth of improved lots and unimproved lots increase by 0.02 percent and 0.04 percent, respectively, 

with a 1-percent change in the distribution of tree species from ponderosa pine to Douglas-fir. A 1-percent 

decrease in the presence of large specimen trees bigger than 24 inches dbh (approximately two trees per 

acre) decreases improved lot worth by 3.64 percent and 

unimproved lot worth by 2.61 percent. Property value 

is evidently more sensitive to visible damage and the 

presence of large trees.

Walsh and others (1981a) estimated the dollar 

equivalents in reduced mountain property value due 

to a 15-percent change in the forest quality indicator 

variables (calculated with an average of 212 trees per 

acre and mountain lots averaging 1 acre per lot). A 

15-percent reduction in the number of trees on the lot 

decreases improved lot worth by $984 and unimproved 

lot worth by $578. Improved lot worth decreases by 

an additional $602 if the number of trees on adjacent 

property affecting the near view decreases by 15 percent. A 15-percent reduction in the average tree size 

results in a $1,228 reduction in the worth of improved 

lots and a $783 reduction in that of unimproved lots. 

With an increase of 15 percent in expected damage due 

to an insect infestation, based on expert opinion, improved lot worth decreases by $2,351 and unimproved 

lot worth decreases by $1,364. A $7,034 reduction in 

the worth of improved lots and a $4,045 reduction in 

that of unimproved lots results from a 15-percent increase in visible insect-caused damage to trees. With 

15 percent of the lot treeless because of an insect infestation, the worth of improved lots and unimproved 

lots decrease by $907 and $896, respectively. With a 

15-percent change in the distribution of tree species 

from ponderosa pine to Douglas-fir results in an increase in the worth of improved lots by $61 and that 

of unimproved lots by $84. The increasing percentage 

of Douglas-fir on the property leads to increased property value probably because Douglas-fir is scarce in 

the elevation range in which the study was conducted. 

A 1-percent decrease in the number of large specimen 

trees per lot decreases the worth of improved lots by 

$918 and that of unimproved lots by $449.

To account for the natural recovery of a forest 

from an insect infestation, Walsh and others (1981a) 

developed a regrowth model. The regrowth model 

adjusts the losses over time as a result of the natural 

regeneration abilities of the affected forest. The losses 

estimated are per year and continue to be realized for 

Colorado Front Range forests until replacement trees 

are of sufficient size and quality so that the original 

losses are completely offset. Benefits not included 

in this study are the benefits of forest quality to the 

general public who may be willing to pay for the preservation of forest quality, and for option, existence, 

and bequest values. Other sources of value held by the 

general public include the psychological and ecological values. The psychological and ecological benefits 

associated with forest health may be large enough to 

exceed the economic estimates listed in this study.

8. Walsh and others 1981b. Appraised Market 

Value of Trees on Residential Mountain Properties 

in the Colorado Front Range and the Mountain 

Pine Beetle and Western Spruce Budworm 

(Appendix Table 8)

Walsh and others (1981b) estimate the impact 

of the mountain pine beetle and western spruce 

budworm on the market value of improved and unimproved mountain properties in the Front Range of 

the Colorado Rocky Mountains. Trees provide shade, 

aesthetic quality, wildlife habitat, privacy, and other 

amenity benefits to the owners of property. Mountain 

pine beetles attack and either kill or cause visible 

damage to ponderosa pine trees. Western spruce budworms attack Douglas-fir trees, causing extensive 

visible damage, but rarely kill the trees. Insect infestations that kill or cause visible damage to trees near 

residential mountain properties have an impact on the 

satisfaction derived from owning and living on mountain property, which is reflected in the property value. 

Real estate appraisers allocate worth to all marketable 

attributes of a property in appraising the property’s 

market value for potential or current owners. This 

study was conducted to develop and apply a procedure for measuring the effect of mountain pine beetle 

and western spruce budworm infestations on the contributed worth of trees to residential property in the 

Front Range of the Colorado Rocky Mountains. The 

results of the study contributed to the assessment of a 

USDA Forest Service forest insect and disease management program including the assessment of forest 

insect control programs, and of citizen participation 

in management decisions and cost-sharing programs.

A representative sample of 21 real estate appraisers 

of Front Range mountain property were interviewed 
USDA Forest Service RMRS-GTR-275WWW. 2012. 25

in 1980. Using the contingent valuation method (with 

the iterative bidding technique), Walsh and others 

(1981b) estimate insect impacts on the contributed worth of trees to mountain residential property 

through the professional opinions of mountain property real estate appraisers for changes in different 

forest quality indicator variables. The contingent 

changes in forest quality caused by insect infestations 

investigated by the authors and depicted in color photos include (1) the number of trees 6 inches in dbh or 

more on the residential property and on adjacent property in the near view, (2) the size of the trees on the 

property, (3) an expert expectation of a severe insect 

infestation, (4) the presence of visible tree damage on 

the property, on adjacent property affecting the near 

view, and on distant property affecting the far view, 

(5) the distribution of ponderosa pine and Douglas-fir 

on the property, (6) the distribution of trees over the 

property (the presence of treeless patches caused by 

an insect infestation), and (7) the presence of large 

specimen trees. The study divides mountain properties into improved lots (lots where a mountain home 

has been constructed) and unimproved lots (plotted 

lots where a subdivision has been filed but where no 

mountain homes have been constructed).

The authors estimate the average arc elasticities for 

the contributed worth of trees to mountain properties 

in a 1- to 15-percent decrease from the optimal level 

of the indicator variable with a mean number of 106 

trees per acre. The elasticities show that a 1-percent 

decrease in the number of trees 6 inches in dbh or 

more on the property results in a 0.14-percent decrease in the appraised contributed worth of the trees 

to improved lots and a 0.15-percent decrease in that of 

unimproved lots. A 1-percent decrease in the number 

of trees on property adjacent to improved lots affecting the near view decreases the worth of these lots 

by an additional 0.12 percent. The worth of improved 

and unimproved lots decreases by 0.53 percent and 

0.54 percent, respectively, with a 1-percent decrease 

in the average size of the trees on the lots (calculated in the 3-inch to 12-inch dbh range). The worth 

of improved lots decreases by 0.94 percent and that 

of unimproved lots decreases by 0.92 percent with a 

1-percent increase in the expert expectation of insect 

damage to trees on the lot. A 1-percent increase in 

visible damage caused by an insect infestation results 

in a 2.48-percent decrease in the worth of improved 

lots and a 2.06-percent decrease in that of unimproved lots. Improved property decreases in worth by 

1.07 percent and unimproved property decreases by 

1.85 percent with a 1-percent increase in the visible 

damage caused by insects on adjacent property affecting the near view from the residential property. A 

1-percent increase in visible damage affecting the far 

view decreases in worth by 0.16 percent for improved 

property and by 0.64 percent for unimproved property. A 1-percent increase in treeless areas, due to insect 

infestations, results in a 0.29-percent decrease in the 

worth of improved and unimproved lots. The worth of 

improved and unimproved lots increases by 0.05 percent and 0.06 percent, respectively, with a 1-percent 

change in the distribution of tree species from ponderosa pine to Douglas fir. A 1-percent decrease in the 

presence of large specimen trees bigger than 24 inches dbh (approximately two trees per acre) decreases 

the worth of improved lots by 1.94 percent and that 

of unimproved lots by 2.70 percent. Appraiser estimation of property value is most sensitive to visible 

damage and the presence of large trees.

Walsh and others (1981b) estimate the dollar 

equivalents in reduced mountain property value due 

to a 15-percent change in the forest quality indicator 

variables (calculated with an average of 106 trees per 

acre and mountain lots averaging 1 acre per lot). A 

15-percent reduction in the number of trees on the lot 

decreases the worth of improved lots by $209 and that 

of unimproved lots by $201. The worth of improved 

lots decreases by an additional $241 if the number 

of trees on adjacent property affecting the near view 

decreases by 15 percent. With a 15-percent reduction 

in the average tree size, improved lot and unimproved 

lot values decline by $1,155 and $1,014, respectively. With an increase of 15 percent in the expectation 

of damage due to an insect infestation based on expert opinion, the worth of improved lots decreases 

by $1,810 and that of unimproved lots decreases by 

$1,492. A $3,902 reduction in the worth of improved 

lots and a $2,715 reduction in that of unimproved lots 

results from a 15-percent increase in visible damage to trees. The worth of improved lots decreases 

by an additional $1,688 for visible damage affecting 

the near view and by $259 because of visible damage 

affecting the far view with a 15-percent increase in 

visible damage on surrounding property. The worth of 

unimproved lots decreases by an additional $2,445 for 

visible damage affecting the near view and by $848 

because of visible damage affecting the far view with 

a 15-percent increase in visible damage on surrounding property. With 15 percent of the lot treeless due 

to an insect infestation, improved lot and unimproved 

lot worth decreases by $493 and $476, respectively. 

A 15-percent change in the distribution of tree species from ponderosa pine to Douglas-fir results in an 
26 USDA Forest Service RMRS-GTR-275WWW. 2012.

increase in the worth of improved and unimproved 

lots by $102. The increasing percentage of Douglasfir on the property leads to increased property value 

probably because Douglas-fir is scarce in the elevation 

range in which the study was conducted. A 1-percent 

decrease in the number of large specimen trees per 

lot decreases the worth of improved lots by $251 and 

unimproved lots by $294.

To account for the natural recovery of a forest 

from an insect infestation, the authors developed a regrowth model. The regrowth model adjusts the losses 

over time as a result of the natural regeneration abilities of the affected forest. The losses estimated are per 

year and continue to be realized for Colorado Front 

Range forests until replacement trees are of sufficient 

size and quality that the original losses are completely offset. Benefits not included in this study are the 

benefits of forest quality to the general public who 

may be willing to pay for the preservation of forest 

quality, and for option, existence, and bequest values. 

Other values potentially held by the general public 

include those derived from psychological and ecological values. The psychological and ecological benefits 

associated with forest health may be large enough to 

exceed the economic estimates listed.

The two samples used by Walsh and others (1981a 

and 1981b) (residential property owners and real 

estate appraisers, respectively) can be compared 

directly. Residential property owners reported the 

contributed worth of forest quality to their perceived 

property value. Real estate appraisers gave their professional opinions concerning what they believed 

trees contribute to the worth of residential mountain 

property. The average arc elasticities reported show 

that real estate appraisers preferred the number of 

trees per acre less than property owners did. Owners 

of property with large specimen trees appreciate them 

more highly than real estate appraisers do, supporting the belief that specific trees may carry larger 

psychological benefits for the owner of the property. 

Real estate appraisers place greater emphasis on insect impacts to unimproved property than do property 

owners. This may be because unimproved property 

relies more heavily on the contribution of natural assets to its overall market value than does improved 

property. Improved property includes structures such 

as homes that comprise a large portion of its overall market value. Also, owners of improved property 

probably spend more of their time on their property 

than do owners of unimproved property.

9. Loomis and Walsh 1988. Recreation and Tree 

Stand Characteristics in the Colorado Front 

Range (Appendix Table 9)

Loomis and Walsh (1988) estimate the net economic benefits of recreation in the Colorado Rocky 

Mountains Front Range as a function of tree stand 

density and tree size. This study is included because 

the data set used for analysis is the Walsh and Olienyk 

(1981) data set. Effects of tree stand density and tree 

size on recreation are the result of perceived impacts 

from mountain pine beetles. Information on the effects of tree stand density and tree size on recreation 

use and benefit is important to the management of forests for stocking rates and tree growth. Different tree 

densities and average tree size in a forest stand can 

give rise to different recreation activities. This study 

investigates the recreation use and benefits of six recreation activities: camping, picnicking, backpacking, 

hiking, fishing, and use of off-road vehicles (ORVs). 

The results of the study can be used to derive the 

management implications of intensive forest management (e.g., planting affected areas instead of relying 

solely on natural regeneration, silvicultural practices 

like thinning).

A stratified random sample of 435 recreation users 

of six forest recreation sites composed of mixed-age 

ponderosa pine in the Front Range of Colorado was 

interviewed onsite in summer 1980. The contingent 

valuation method was used to estimate the recreationist’s maximum net willingness to pay for different 

quantities of trees per acre and for changes in average tree size per acre, the changes being presented to 

the respondents through the use of color photos. The 

implied factor that caused the changes in tree stand 

density and average tree size is the mountain pine 

beetle. Therefore, the survey shows that changes in 

net willingness to pay are contingent on changes in 

tree stand density and average tree size, in this case 

being the result of insect infestations.

Recreation activities considered in the survey were 

found to be positively related to tree stand density 

and tree size except for the use of ORVs, which is 

negatively related to these factors. This means that 5 

out of 6 of the activities have increased benefits with 

increased tree stand density and average tree size. 

The estimated annual recreation benefits as maximum 

willingness to pay per visitor, estimated at an average 

of 200 trees per acre, are $145 for camping, $169 for 

picnicking, $161 for backpacking, $302 for hiking, 
USDA Forest Service RMRS-GTR-275WWW. 2012. 27

$321 for fishing, and $97 for the use of ORVs. The 

annual recreation benefits per visitor as a function of 

tree size are estimated to be $28 when the average 

tree size per stand is 2.5 inches dbh, and $210 with an 

average tree size per stand of 10.5 inches dbh. Other 

estimates reported include recreation benefits per visitor day of $5 when average tree size is 4 inches dbh, 

and of $13 when average tree size is 13 inches dbh.

10. Walsh and others 1989. Recreation and the 

Demand for Trees in National Forests in the 

Colorado Front Range and the Mountain Pine 

Beetle (Appendix Table 10)

Walsh and others (1989) estimate and compare the 

average benefits per recreation trip in the Colorado 

Front Range as a function of the number of trees per 

acre 6 inches in dbh or more. This study is based on 

the original Walsh and Olienyk (1981) data set. The 

main purpose of this paper is to compare the benefits 

measured by means of the contingent valuation method as dollars willingness to pay for forest quality (the 

number of trees 6 inches in dbh or more) and benefits estimated by means of the travel cost method as 

consumer surplus. The study is included in this report 

because it includes three estimates of average benefits 

per recreation trip that are not considered in the Walsh 

and Olienyk (1981) study.

Recreation demand functions are derived using 

contingent valuation and travel cost methods. One 

measure of the average benefit per recreation trip is estimated by means of the contingent valuation method, 

and two measures are estimated by means of the travel 

cost method using two different econometric regression procedures (ordinary least squares and two-stage 

least squares). The results of the study support the hypothesis that the contingent valuation and travel cost 

methods produce comparable estimates. The estimates 

reported can be included in an economic assessment of 

a forest management alternative that incorporates market and nonmarket recreation use benefits.

A stratified random sample of 435 recreation users 

of six forest recreation sites composed of mixed-age 

ponderosa pine in the Front Range of Colorado was 

interviewed onsite in summer 1980. The contingent 

valuation method is used to derive the recreationist’s 

demand for trees as an essential part of the recreation 

experience. A subsample of 220 recreationists (excluding off-road vehicle users and nonresidents) was 

selected for participation in the travel cost method of 

demand analysis. The travel cost method indirectly 

derives the recreation demand for trees. Both demand 

functions are derived on the basis of the changes in the 

number of trees per acre as represented in color photos. After the recreation demand functions are derived, 

total benefits can be calculated as willingness to pay 

for the contingent valuation method and as consumer 

surplus for the travel cost method.

Walsh and others (1989) estimate the net average 

recreation benefits per user day from the contingent 

valuation method as $24. This and the following estimates are based on approximately 178 trees per acre 

and 2.7 days per trip. From the travel cost method of 

demand analysis, net average recreation benefits per 

user day, using the ordinary least squares regression 

technique, are estimated as $26. From the travel cost 

method, using the two-stage least squares regression 

technique, net average recreation benefits per user day 

are estimated as $20. Statistical tests show that the estimates based on all three methods are not statistically 

different.

11. Walsh and others 1990. Total Economic 

Nonmarket Worth of Forest Quality in Colorado 

National Forests and the Mountain Pine Beetle 

and Western Spruce Budworm (Appendix Table 

11)

Walsh and others (1990) estimate the total economic 

nonmarket worth or public benefits of protecting forest 

quality in National Forests in Colorado. Total economic nonmarket worth accrues from recreation use, 

option, existence, and bequest values (Randall and 

Stoll 1983). Recreation use value is the benefit derived 

from the recreation experience and is restricted to onsite direct use of the resource. Option, existence, and 

bequest values are nonuse or passive-use benefits and 

can be derived either onsite or offsite. Option value is 

the satisfaction of knowing that a resource is protected 

for its potential use in the future. Existence value is 

the satisfaction of knowing that a resource is protected 

for its own sake. Bequest value is the satisfaction of 

knowing that a resource is protected for the potential 

use of others, including family and future generations. 

Measuring passive-use value of protecting forest quality is important because an economic assessment of a 

management alternative that includes only direct-use 

benefits would understate the true worth of the forest, 

possibly resulting in a socially inefficient outcome. The 

general population, including users and nonusers of 

forest resources, are affected by changes in forest quality and may be willing to pay to protect forest health. 
28 USDA Forest Service RMRS-GTR-275WWW. 2012.

Therefore, in deciding between management alternatives, the total economic nonmarket worth of forest 

resources must be incorporated in the decision process.

A random sample of 198 households in the Fort 

Collins and surrounding rural areas was interviewed in 

1983. The sample was found to be socially and demographically representative of Colorado residents. The 

study uses the contingent valuation method (with an 

iterative bidding technique) to estimate the maximum 

net total benefits and recreation use benefits of protecting forest quality. The indicator variable for forest 

quality used is tree density measured as the number of 

trees 6 inches in dbh or more as depicted in color photos. The households surveyed state their maximum net 

willingness to pay for different forest stand densities as 

the result of mountain pine beetle and western spruce 

budworm infestations.

Walsh and others (1990) find that total average annual willingness to pay per Colorado household for 

the protection of forest quality is $52 (estimated with 

an average tree stand density of 150 trees per acre). 

Recreation-use benefit is 27.4 percent of total benefits, 

or $14 per household per year. Nonuse or passiveuse benefit (option, existence, and bequest) make up 

72.6 percent of the total, or $38 per household per year. 

Option and existence benefit is $11 per household per 

year each, and bequest benefit is $16 per household 

per year. The results show that nonuse or passive-use 

benefits are more than three and a half times greater 

than recreation-use benefits. Therefore, assessments 

of management alternatives that rely on direct onsite 

use value alone greatly understate the total benefits of 

a resource quality protection program and may result 

in inefficient resource allocations. These results are 

consistent with those collected by Brown (1993) who 

showed that existence and bequest value estimates derived through the contingent valuation method can be 

two to 10 times larger than direct onsite recreation-use 

value.

12. Jakus and Smith 1991. Private and Public 

Landscape Amenities in the Pennsylvania/

Maryland Area and the Gypsy Moth 

(Appendix Table 12)

Jakus and Smith (1991) collected data on households’ willingness to pay for aesthetic benefits that 

accrue solely to their own household versus benefits 

that accrue to the neighborhood in general from different gypsy moth control programs in the south central 

Pennsylvania/north central Maryland area. One program sprayed the residential (privately owned) areas 

only, while the public program sprayed both residential and common areas in the neighborhood. The 

author’s study used the data collected to compare 

use and nonuse benefits associated with protection of 

landscape amenities. The hypothesis of the research 

is whether contingent behavior questions can be used 

for measuring use and nonuse values derived from an 

environmental resource (such as landscape aesthetics) that provides both private and public benefits. The 

contingent valuation method, with dichotomous choice 

elicitation, was used in a telephone-mail (informative brochure)-telephone survey of a 10-county area; 

436 surveys were completed.

Respondents were asked to bid their maximum willingness to pay for each of two public gypsy moth control 

programs. The programs bid on include (1) spraying of 

a bacterial insecticide on residential properties only, and 

(2) spraying of a bacterial insecticide on residential and 

surrounding public areas (local parks and greenways). 

From the data, two linear and two nonlinear models are 

estimated, both with and without sample selection correction. A sample selection adjustment is introduced 

to account for nonparticipants in the second telephone 

interview stage. The estimated average household willingness to pay per year for the uncorrected linear model 

with a 25-percent reduction in defoliation ranges from 

$348 to $352 for the private program, and from $395 

to $474 for the public program. The uncorrected nonlinear model for a 25-percent reduction in defoliation 

estimates average annual household willingness to pay 

as ranging from $464 to $534 for the private program, 

and $608 to $670 for the public program. When sample 

selection is corrected for, the linear specification for the 

private program results in an average annual household 

willingness to pay of $254 to $271, and for the public program of $314 to $344. The corrected nonlinear 

model estimates the average annual household willingness to pay as $376 to $420 for the private program, 

and $511 to $527 for the public program.

The authors conclude that individuals distinguish 

between private and public services provided by a 

gypsy moth control program through protecting landscape amenities. The results show an increase of 12 to 

36 percent in average annual household willingness to 

pay for a public-scope program over a private scope 

program with the uncorrected models, and an increase 

of 16 to 36 percent for the sample selection corrected 

models. Therefore, individuals derive both use and 

nonuse benefits from environmental resources that exhibit private and public goods characteristics. This can 

be an important motivation for the private support of 

public programs.
USDA Forest Service RMRS-GTR-275WWW. 2012. 29

13. Haefele and others 1992. Total Economic 

Nonmarket Worth of Forest Quality in the 

Southern Appalachian Mountains and the Balsam 

Woolly Adelgid (Appendix Table 13)

Haefele and others (1992) estimate the total economic nonmarket worth of protecting forest quality in the 

Southern Appalachian Mountains in North Carolina, 

Tennessee, and Virginia. The study decomposes total 

economic nonmarket worth into use and nonuse or 

passive-use value components. Nonuse value is further 

decomposed into bequest and existence values. Over 

the past few decades, two major impacts have affected 

the sustainability of the spruce-fir ecosystem in the 

Appalachians. The first is the decline in the number of 

Fraser fir trees in the area. The balsam woolly adelgid 

attacks the Fraser fir, resulting in high tree mortality 

rates. The other impact is the result of atmospheric deposition, such as acid rain, which is reducing the red 

spruce population and its regrowth potential. The results show that the general public is willing to pay for 

forest quality protection in the eastern United States, 

that individuals value forests for more than their own 

personal direct use, and that nonuse or passive-use 

value is greater than recreation-use value in the total 

economic nonmarket worth of protecting forest quality.

A random sample of 1,200 households was surveyed 

through the mail within a 500-mile radius of Asheville, 

North Carolina, in 1991. The contingent valuation 

method was used to estimate the maximum net benefits as willingness to pay for forest quality protection 

in the Southern Appalachian Mountains. The elicitation methods employed in the study were modified 

payment card and discrete choice, allowing for a comparison of the two methods for consistency of benefit 

estimates. The households were also asked to partition 

total willingness to pay into its component values: use, 

existence, and bequest values. The indicator variable is 

visual quality as depicted in color photos with changes in visual quality as the result of insect infestation 

or atmospheric deposition. The households surveyed 

state their maximum willingness to pay contingent on 

changes in forest quality for two areas: along roads and 

trails, comprising approximately one third of the total 

forest area, and for the whole forest area.

The pretest and focus group results for this study are 

presented by Holmes and others (1990). Haefele and 

others (1992) find that total average annual willingness 

to pay per household for forest quality along roads 

and trails ranges from $19 for the modified payment 

card version to $63 for the discrete choice version. 

The estimated total average annual willingness to pay 

per household for the whole forest ranges from $22 

for the modified payment card version to $107 for the 

discrete choice version. The disparity between the two 

method estimates may be due to anchoring in the modified payment card approach, in which respondents are 

conditioned by the bid levels, providing them with 

valuation clues. Discrete choice may also exhibit anchoring along with upward rounding and the desire 

to provide “correct” answers by the respondents, thus 

inflating willingness to pay bids. Walsh and others 

(1989a) show that discrete choice models typically return larger willingness to pay estimates than modified 

payment card and open-ended question formats.

The allocation of total economic nonmarket worth 

to its components is very similar for the two elicitation methods. Total benefits estimated by means of 

the modified payment card method ($22) are allocated 

as 8 percent for use, 59 percent for existence, and 30 

percent for bequest value. This results in the average 

annual willingness to pay, for the use of a spruce-fir 

forest at a given quality level, of $2; the existence benefit of the forest being $13; and the bequest benefit of 

the forest being $7. These benefits, based on the modified payment card method, are very similar to those 

estimated in the pretest (Holmes and others 1990). The 

allocation of total economic nonmarket worth via the 

discrete choice method ($107) is 13 percent for use, 

56 percent for existence, and 31 percent for bequest 

value. This results in average annual willingness to pay 

for the use of a spruce-fir forest at a given quality level 

of $14; existence benefits being $60 and bequest benefit being $33. The results show that when nonuse or 

passive use values are included in the benefit estimate 

of forest quality protection, the total benefits are 7 to 

12 times greater than recreation use value alone. These 

results support the evidence in Walsh and others (1990) 

and Brown (1993). The efficient allocation of forest resources depends on the estimation of total economic 

worth.

14. Miller and Lindsay 1993. Support for a 

Gypsy Moth Control Program in New Hampshire 

(Appendix Table 14)

Miller and Lindsay (1993) estimate the public 

support for a gypsy moth control program in New 

Hampshire through residents’ willingness to pay for 

the program. In 1981, the gypsy moth population 

peaked, causing severe defoliation of 195,000 acres 

out of 2,000,000 infested acres in New Hampshire 

forests. At the time of the study, New Hampshire did 

not have a state gypsy moth program, leaving towns, 
30 USDA Forest Service RMRS-GTR-275WWW. 2012.

cities, landowners, and homeowners to bear the costs 

of controlling gypsy moths. The costs include control 

methods, clean-up, and tree loss. Other costs include 

the psychological and social costs such as aesthetic 

degradation, recreation loss, and nuisance factors. 

Other impacts include wildlife habitat changes in tree 

browse and protective foliage.

This study uses the contingent valuation method, 

with dichotomous choice elicitation of willingness 

to pay. Miller and Lindsay surveyed 669 households 

from three towns: Bow, Conway, and Exeter. Bow 

represents the towns that experienced severe defoliation and had implemented a municipality-wide moth 

control program. Conway represents areas that experienced moderate to severe defoliation but did not adopt 

any central control program. Exeter represents towns 

that experienced no appreciable gypsy moth-caused 

damage. The results show that Bow residents’ mean 

and median annual willingness to pay per household 

is $84 and $62, respectively. Conway residents’ mean 

and median annual willingness to pay per household is 

$55 and $31, respectively. And Exeter residents’ mean 

and median annual willingness to pay per household 

is $56 and $27, respectively. Aggregating the annual 

willingness to pay of the three towns results in mean 

and median annual willingness to pay per household 

of $70 and $43, respectively. On a per-acre basis, the 

aggregate mean and median annual willingness to pay 

per household is $16 and $10, respectively. This results 

in aggregate public support for a statewide gypsy moth 

control program of $13 million to $28 million mean 

annual willingness to pay, and $8 million to $17 million median annual willingness to pay. These results 

show strong support for a gypsy moth control program 

in New Hampshire.

15. Holmes and Kramer 1996. Total Economic 

Nonmarket and Existence Worth of Forest Quality 

in the Southern Appalachian Mountains and the 

Balsam Woolly Adelgid (Appendix Table 15)

Holmes and Kramer (1996) estimate the total economic nonmarket and existence worth of protecting 

forest quality in the Southern Appalachian Mountains in 

North Carolina, Tennessee, and Virginia. Total nonmarket economic worth is defined as the summation of use 

and existence values, where use value is the utility (or 

satisfaction) derived from active use of the resource and 

existence value is the utility derived from the resource 

for all other reasons other than active use. The researchers investigate the economic measures of forest health 

protection for the boreal montane forest ecosystem, 

75 percent of which is contained in the Great Smoky 

Mountains National Park. Over the past few decades, 

mortality of the spruce and fir trees in this ecosystem 

has increased dramatically. This is generally attributable to the balsam woolly adelgid and air pollution.

The households sampled are within a 500-mile radius of Asheville, North Carolina, and were surveyed 

through a mail-out, mail-back questionnaire. This 

study elicited willingness to pay for the protection of 

the remaining healthy spruce-fir forests through the 

use of the contingent valuation method with a dichotomous choice elicitation procedure. Of the 210 surveys 

returned with usable dichotomous choice responses, 

175 were for users of the ecosystem who stated total 

economic nonmarket worth, and 35 were for nonusers 

of the ecosystem who stated existence worth only. This 

allows for testing whether the existence component 

can be distinguished from total economic value. The 

indicator of forest health was visual quality as depicted 

in color photos with changes in quality resulting from 

insect infestation or atmospheric deposition. This and 

other data collected were used in a test on the convergent validity of two contingent valuation elicitation 

methods: dichotomous choice and modified payment 

card (Holmes and Kramer 1995).

Holmes and Kramer (1996) estimate the median annual willingness to pay as $36 for users (representing 

total economic nonmarket worth) and as $11 for nonusers (representing the existence component). They 

found the two estimates to be statistically different. 

The study draws three conclusions. First, the responses 

are consistent with the compositional approach to total economic worth, i.e., a component is less than the 

whole. Second, existence worth is a distinct and substantial component of total economic worth of forest 

health (existence comprised approximately 30 percent 

of the total). And third, the existence component is 

distinct from the use component, based on economic 

characteristics of direct-use and passive-use values.

16. Thompson and others 1999. Valuation of Tree 

Aesthetics on Small Urban-Interface Properties 

(Appendix Table 16)

Thompson and others (1999) developed a hedonic 

pricing model to identify how different aspects of forest condition contribute to the value of wildland-urban 

interface properties in the Lake Tahoe Basin. The 

Lake Tahoe Basin is located on the border between 

California and Nevada. The forests surrounding the basin are of two types. On the Nevada side of the lake the 

forests are populated with mixed and pure Jeffrey pine 
USDA Forest Service RMRS-GTR-275WWW. 2012. 31

(Pinus jeffreyi) stands. The California side consists 

mainly of the Sierra Nevada mixed-conifer type (i.e., 

California white fir (Abies concolor), ponderosa pine 

(Pinus ponderosa), sugar pine (Pinus lambertiana), 

incensecedar (Libocedrus decurrens), California black 

oak (Quercus kelloggii), and Douglas-fir (Pseudotsuga 

menziesii). Trees on or near residential properties can 

provide a wide range of benefits to homeowners including wildlife habitat, energy and water savings, 

pollution reduction, and aesthetic value. The authors 

hypothesized that traditional housing valuation characteristics, along with forest aesthetics characteristics, 

would account for a property’s price. A second hypothesis asserted that tree size, number of trees per acre, 

condition, and species would influence forest property values. Additional variables were used to further 

examine the effect of forest pests and the degree of infestation in trees.

The characteristics of property transactions between 

1989 and 1994 were collected for the California side of 

the Lake Tahoe Basin. For each property in the sample, 

tree and plant groupings were sampled for stand structure, stand composition and forest condition. The results 

of the model suggested that removing smaller trees from 

wildland-urban forests can have an immediate impact 

on average tree size and improve the view shed of and 

from the home. By removing dense and diseased trees, 

homeowners can reduce fire risk, enhance the aesthetic 

value of their home, and add value to their property. 

“If thinned trees were those most heavily infected then 

property values could be enhanced an additional 5% 

and as much as 30% on properties with many infected 

trees” (p. 229). The results of the hedonic generalized 

least square model revealed that trees infected by an invasive forest pest (insect) can reduce property value by 

as much as $26,390 dollars on average.

The authors concluded that although Lake Tahoe 

Basin represents a special case real estate market, the 

results obtained from the study are relevant. While 

stand density and overall forest health may be proxies 

for aesthetic qualities of a property, they can further 

enhance property values in other ways.

17. Haefele and Loomis 2001. Using the Conjoint 

Analysis Technique for the Estimation of Passive 

Use Values of Forest Health (Appendix Table 17)

Haefele and Loomis (2001) use the contingent 

choice technique to examine alternative management 

programs for three different forest pest situations in the 

United States. The first pest scenario is that of the gypsy moth, Lymantria dispar, in the northeastern United 

States. The gypsy moth, an invasive pest, has a large 

effect on ornamental trees on private property and in 

recreation areas. The second scenario dealt with the 

western spruce budworm, Choristoneura occidentalis, 

one of the most prominent tree defoliating insects in 

the West. This insect has a large effect on the yields 

of commercial timber and is native to most forests in 

the Northwestern United States. The third scenario 

involves the southern pine beetle. The pine beetle, a 

native insect, affects commercial timber production 

and wildland areas where control methods are limited.

The authors gathered data by presenting the three 

insect infestation scenarios in a questionnaire. The 

questionnaires were then mailed, in equal density, 

to the three geographic regions most affected by the 

pests (Northeastern United States, Southeastern United 

States, and the State of Oregon). Each pest management scenario in the questionnaire described the insect, 

its area of impact, and the effects of an uncontrolled 

infestation. Three management scenarios were then 

given and the respondents were asked to rate them on 

a scale of 1 to 10.

Statistical analysis of the data was conducted using 

an ordered probit model. The model used the following independent variables: number of forest acres 

expected to be infested within 15 years of implementation of the management program, cost per household 

of the management program, expected percent changes 

in commercial timber harvests, and a dummy variable indicating whether a pest is native or non-native. 

Haefele and Loomis (2001) found the coefficient on 

acres infested to be negative and significant, indicating 

increased disutility for increases in the size of the infested area. The marginal economic value of a one-acre 

reduction in pest-infested forestland was found to be 

$0.54 per household.

The authors conclude that households value reduction in forest pest infestations, even in regions far away, 

which make visitation less likely. Forest infestation 

reduction is a public good that may affect millions of 

households. If the passive use value of the infestation 

reduction is wide spread and in a location with a large 

population, this value could exceed several millions of 

dollars for a small reduction.

18. Kramer and others 2003. Contingent 

Valuation of Forest Ecosystem Protection 

(Appendix Table 18)

Kramer and others (2003) estimate willingness to pay (WTP) for protection of the remaining 

healthy spruce-fir forests in the southern Appalachian 
32 USDA Forest Service RMRS-GTR-275WWW. 2012.

Mountains and Great Smokey Mountain National Park. 

The high elevation spruce-fir forest, covering 26,610 

ha of mountain tops in Tennessee, North Carolina, and 

Virginia, has seen a large increase in spruce-fir mortality since the 1950s. The decline of the spruce-fir forest 

can easily be seen from roads and trails throughout the 

area. The cause of this decline is primarily attributed 

to the balsam woolly adelgid (Adelges piceae). The 

experiment concentrates on two increments of forest 

protection: areas along roads and trail corridors and the 

entire ecosystem. Protecting trees along the roads and 

trails were meant to appeal to people who value the 

ecosystem for recreational use. Protection of the entire 

ecosystem was thought to appeal to individuals who 

value the ecosystem as a whole and not simply the direct benefits it provides.

The authors used a mail-out, mail-back contingent valuation survey to gather WTP estimates for 

the protection of the remaining spruce-fir forests and 

other information about the respondents. The survey 

was sent to households within a 500-mile radius of 

Ashville, North Carolina, a population with familiarity 

of the study area. The survey included photographs of 

three stages of forest decline and a map of the area of 

interest. All of the questions contained in the survey 

were in dichotomous choice format. The data collected 

was used to test three hypotheses: (1) WTP >$0; (2) incremental WTP increases at a decreasing rate; and (3) 

people would be willing to pay to protect an entire ecosystem. A bivariate probit model was used to estimate 

the parameters of the explanatory variables and the 

Krinsky-Robb bootstrap technique was used to test the 

hypotheses.

The authors, after testing their three hypotheses, 

found that incremental WTP for ecosystem protection 

is positive and WTP for forest protection increases at 

a decreasing rate. The results of the bivariate probit 

model showed that factors affecting an individual’s 

WTP included household income (a categorical variable), membership to an environmental organization, 

and if protecting the spruce-fir forest for reasons including recreational activities and scenic beauty were 

important to them or not. The results for an individual’s 

WTP were broken up into three categories: use value, 

bequest value, and existence value. Use value, was an 

estimated $4 (13 percent of total WTP); bequest value 

was an estimated $8 (30 percent of total WTP) and the 

estimated existence value was $16 (57 percent of total WTP) Total value for spruce-fir forest protection 

amounts to $28 per person.

The authors conclude that the assessment of forest 

values is a useful practice, as the results have many 

applications in policy and management. Not only can 

estimates from nonmarket valuation studies be used directly, but they can also improve the understanding of 

the economic importance of the structure, health, and 

extent of forest ecosystems. This study, among others, 

shows that protection and restoration of forest ecosystems is an economic good that people are willing to 

pay for, and, therefore, it should be valued as such.

19. Asaro and others 2006. Control of Low-Level 

Nantucket Pine Tip Moth Populations: A Cost 

Benefit Analysis (Appendix Table 19)

Asaro and others (2006) obtained damage estimates 

from 200 trees over a 3-year period to estimate the 

willingness to pay (WTP) for Nantucket pine tip moth 

(Rhyacionia frustrana) control at the beginning of a rotation of loblolly pine. They also aimed to establish an 

economic injury level that, once reached, justified the 

application of pesticides. Loblolly pine, Pinus taeda

L., is the most commercially important tree species in 

the southeastern United States. The pine tip moth has 

the largest effect of any insect on the annual growth of 

loblolly pine seedlings and saplings. The pine tip moth 

causes significant long-term growth losses in the pines 

and the effects are especially prevalent in monoculture type environments, such as intensively managed 

plantations.

The authors used two loblolly pine plantations located in Oglethorpe County, Georgia, to conduct their 

experiment. The sites were chosen because of the three 

annual generations of pine tip moth in the region and 

the availability of non-vegetated land. Each of the two 

sites was planted with 1,750 trees/ha in 1998. By random design, a plot of 200 trees was established at each 

site, to maximize degrees of freedom for error. The 

study was designed to compare trees in different damage categories, thus trees selected for treatment and 

measurement were positioned 10 per row, every other 

tree, and every other row. Within the plots, 150 trees 

were left untreated while 50 trees were sprayed with 

pesticides three times a year. Damage to each tree was 

measured at the end of each pine tip moth generation. 

The relevant measure, percent shoot damage to each 

tree, was obtained by counting all infested and uninfested shoots on a tree. Pine tree heights and diameters 

were measured at the end of the 3rd year of the study 

once growth had ended. The data for each tree was 

then converted into a volume index.

The authors used the data collected to calculate the 

total value of pine tip moth control, the difference between the profitability of timber production with and 
USDA Forest Service RMRS-GTR-275WWW. 2012. 33

without treatment at each of the separate damage categories (intervals of 10% damage). After estimating 

bare land values and the cost of planting and fertilization, the authors calculated WTP values at three 

different interest rates: 3, 5, and 7%. The authors found 

that there was no difference between sprayed and 

unsprayed trees with 0-10% damage. “Trees in the 10-

20% damage category averaged 28.4 and 16.5% less 

volume than sprayed trees at sites 1 and 2, respectively” 

(p. 184). “Trees in the 20-30% damage category averaged 48.2 and 26.2% less volume than sprayed trees 

for sites 1 and 2, respectively, but only site 1 was statistically significant” (p. 185). In all cases the WTP 

for control increases as the discount rate declines and 

damage increases. The estimates for WTP to reduce 

loblolly pine damage from Nantucket pine tip moth 

over one rotation are as follows.

Damage Discount

category rate WTP

0-10% 3% $586 to $1,482

 5% $319 to $852

 7% $183 to $516

10-20% 3% $921 to 2,530

 5% $497 to $1,433

 7% $284 to $857

30-40% 3% $1,413

 5% $755

 7% $429

The WTP estimates have management implications, 

in the form of damage thresholds. This study suggests 

“that even at the lowest damage levels (10-20%) and 

highest real discount rates (7%) there is a WTP value 

of $183, which is enough to accommodate two to three 

sprays over a 3-year period” (p. 186).

It is concluded that significant financial losses from 

pine tip moth attack can be prevented. Due to the 

prevalence of the pine tip moth in this region of the 

United States and the small profit margins in forestry, 

low levels of damage are not alarming. However, tip 

moth management can be important if damage levels 

consistently exceed 30% of shoots. Economic benefits 

from pest control in pulpwood and saw timber plantations can be increased if rotation length of loblolly pine 

is decreased. Another way to increase growth is to predict when pine tip moth populations will exceed 30% 

damage and spray once or twice a year for the first 2 to 

3 years of growth.

20. Holmes and others 2006. Exotic Forest 

Insects and Residential Property Values 

(Appendix Table 20)

Holmes and others (2006) estimate the economic 

damages to homeowners caused by the hemlock woolly adelgid (Adelges tsugae) in Sparta, New Jersey. 

This study tested the relationship between poor hemlock health and the decrease in residential property 

values and whether or not the effect extends across 

parcel boundaries. Eastern hemlock trees are widely 

distributed throughout the Appalachian Mountains, 

northeastern United States, the northern Midwest, and 

parts of Canada. Eastern hemlocks play a central role 

in the forest ecosystems in which it resides. The eastern hemlock is a long lived species, but once a tree is 

moderately or severely infested by the woolly adelgid, 

there is little chance for recovery. Hemlocks produce 

poor quality wood and are, therefore, rarely used in 

timber production. The primary values obtained from 

hemlocks come from their aesthetic value and the ecosystem services they provide.

The authors use data from 3,379 residential property 

sales in the town of Sparta, New Jersey, between 1992 

and 2002. Descriptive statistics of the data include a 

median house age of 29 years, median lot size of one 

half acre, and a median sales price of $342,260 (2002 

dollars). Land cover and use variables, for three spatial 

scales (0.1 km, 0.5 km, and 1.0 km) from the center 

of each parcel, were compiled using satellite data. 

These characteristics included such data as proximity 

to shopping services, surrounding forest type, presence 

of bodies of water, and distance from the closest golf 

course. The technique of image differencing was used 

to track the different levels of defoliation caused by 

the hemlock woolly adelgid. A hedonic property value 

model was used to assess the effects of hemlock quality on property values. The marginal willingness to pay, 

by consumers, for hemlock health was derived from 

the variable hemlock health’s contribution to sales 

prices of the residential properties, using first stage hedonic analysis.

The authors found that parameter estimates on many 

of the housing characteristics were significant at the 

0.01 level or higher. An additional bedroom or bathroom adds 3 – 4% to the value of the house. It was 

also found that additional acreage increases property 

values, with lots over 1 acre receiving a price premium. Several parameter estimates for land use variables 

were also significant, including proximity to a golf 

course, and lakes or ponds on the lot or adjacent to 
34 USDA Forest Service RMRS-GTR-275WWW. 2012.

the property. Parameter estimates on healthy hemlocks 

were positive and significant in all model specifications, indicating that hemlocks are valued for their 

unique aesthetic qualities and people enjoy living in 

or nearby hemlock stands. Thus, hemlock health affects property values where they are located and in 

the broader neighborhood. Hemlocks with severe decline were not statistically significant. However, dead 

hemlocks were found to be positive and statistically 

significant within the 1.0 km buffer from the lot center, 

suggesting that Sparta residents value the inevitable 

growth of new trees and vegetation.

Hemlock trees possess aesthetic characteristics that 

people value. Holmes and others (2006) found that a 

1-acre increase in land containing healthy hemlocks 

increases property value by 0.66 to 8.08%, depending 

on distance from the property’s center. Property value 

decreases 0.96 to 4.76% when the number of moderately healthy trees increases by 1 acre. The authors 

found that increases in severely defoliated hemlock 

trees were statistically insignificant. A 1 acre increase 

in dead trees, within a 1.0 km buffer of the property 

center, was found to increase property value by 2.11%; 

demonstrating that Sparta residents value the regeneration of trees and other vegetation in their far view.

The results of this study show that hemlock decline, 

due to hemlock woolly adelgid, is connected to the 

decline of residential property sale prices in Sparta, 

New Jersey. This phenomenon extends to neighboring properties that also contain declining hemlocks. 

The authors conclude that the “contribution of healthy 

hemlock stands to residential property values appears 

to be qualitatively different than other tree species 

in the housing market under investigation” (p. 164), 

which can be attributed to their unique visual beauty. 

Thus, the landscape externalities caused by the hemlock woolly adelgid should be mitigated in order to 

preserve home values.

21. Huggett and others 2008. Forest Disturbance 

Impacts on Residential Property Values 

(Appendix Table 21)

Huggett and others (2008) examined the economic 

impacts of the hemlock woolly adelgid on private property values in West Milford, New Jersey. The hedonic 

property value model was used to test the relationship 

between hemlock decline and residential property values. Hemlocks are widely used as ornamental trees 

in residential landscapes, and have shown little or no 

opposition to attacks by the woolly adelgid. Hemlock 

trees located near roadways or in small residential 

landscapes can be easily treated with insecticides during the early stages of infestation, but once infestation 

becomes severe, defoliation and loss of tree vigor results in tree death.

The impacts of hemlock woolly adelgid happen 

gradually over the course of several years. Symptoms 

begin with moderate decline and eventually end in tree 

mortality. The authors hypothesized that there exists 

a threshold, beyond which the presence of hemlocks 

shifts the property value function. Thus, the authors 

aimed to find the point in the infestation process at 

which the hemlock decline registers an impact on property prices. Data were collected on many structural and 

landscape aspects of the land parcels sold between 

1992 and 2002, including total area of hemlock trees. A 

second hemlock variable was also created to evaluate 

the point in time at which the hemlocks decline began 

to affect housing prices. Data on the price of the house 

and date sold were also collected. The average sale 

price for the sample was $177,752. Hemlock health 

data were divided into 4 categories: healthy (<25% 

defoliation), moderate decline (25-50% defoliation), 

severe decline (50-75% defoliation), and dead (>75% 

defoliation).

Results of the OLS regression showed that the data 

fit the model very well and that several land cover 

variables play a critical role in determining property 

values. While mixes of healthy and unhealthy hemlocks were found on the parcels sold during 1992 and 

2002, the authors found that hemlock health declined 

rapidly on parcels sold in 2000 and subsequent years. 

The parameter estimate for total area of hemlock trees 

was found to be insignificant for the early stages of the 

outbreak. This indicates that when hemlock trees are 

healthy or in moderate decline they do not influence 

property value. In contrast, the parameter estimate on 

hemlock forests late in the epidemic was negative and 

significant. The results show that the marginal effect of 

1 additional acre of severely defoliated or dead hemlocks decreased property value by 8.3% during the 

study period. Because hemlocks are valued for their 

aesthetic qualities, this loss in value can be attributed 

to the presence of severely defoliated and dead trees.

22. Price and others 2010. Insect Infestation and 

Residential Property Values: A Hedonic Analysis 

of the Mountain Pine Beetle Epidemic 

(Appendix Table 22)

Price and others (2010) estimate willingness to pay 

(WTP) to prevent mountain pine beetle, Dendroctonus 

ponderosae, damage on residential property values in 
USDA Forest Service RMRS-GTR-275WWW. 2012. 35

Grand County, Colorado. Over the last 15 years (1996 

to 2010) mountain pine beetle, along with several other 

species of bark beetles, have been a destructive force 

in the western United States and Canada. Recent studies have shown that the large pine beetle outbreaks can 

be attributed to the drought conditions brought on by a 

changing climate and forest management practices that 

have suppressed fire over the last century. The most 

prominent infestations have taken place in Colorado 

and British Columbia. Agencies such as the Colorado 

State Forest Service and the British Columbia Ministry 

of Forests have estimated the scale of the mountain 

pine beetle infestation, amounting to approximately 14 

million hectares between 1996 and 2007. However, an 

important outcome of the mountain pine beetle damage is a loss in utility, derived from goods and services, 

for residents of the wildland-urban interface (WUI) 

through reduced forest amenities and increased wildfire risk.

There are many benefits to living on the WUI including recreation opportunities, scenic views, and 

increased property values. The mountain pine beetle, 

while integral to the forest ecosystems of Colorado and 

British Columbia, is capable of reaching epidemic levels and causing high levels of tree mortality. Once an 

outbreak begins there is very little that can be done to 

prevent its spread. Trees that are killed by the beetles 

increase the risk of wildfire and become hazard trees for 

recreators. In cases of outbreak levels, as in Colorado 

and British Columbia, the most effective method to 

control infestation is to eliminate the underlying causes. 

Usually this means relaxing fire suppression practices, 

and in areas around the WUI using silviculture techniques such as thinning and controlled burning. The 

objective of these practices is to return the forests to a 

more natural state, improve tree health, diversify tree 

growth stages, and reduce density. Forests that exhibit 

these qualities are much less vulnerable to mountain 

pine beetle attacks and wildfire than those that do not. 

Residents along the WUI in Colorado have attempted 

to control the outbreak of beetles near their homes by 

using chemical (e.g., pesticides) and physical (e.g., 

burning and stripping bark) means. These methods are 

effective, but only when the populations of beetles are 

small and well below outbreak levels.

The authors use the hedonic pricing model in 

Grand County, Colorado, where a vast majority of the 

county’s population lives in the WUI and there exists 

one of the highest concentrations of lodgepole pine 

forests in Colorado. As a result, a large portion of the 

county’s forests have been profoundly affected by the 

mountain pine beetle. Grand County is home to two 

large reservoirs, multiple wilderness areas, a portion 

of Rocky Mountain National Park, and two ski resorts; 

hence, their economy is highly dependent on the recreation and nature-based tourism industries. The data for 

analysis included the sales prices and housing characteristics of homes sold between 1995 and 2006, land 

use maps from the U.S. Geological Survey, and data on 

mountain pine beetle infestations (annual aerial detection surveys) provided by the U.S. Forest Service.

The results showed that housing prices are negatively correlated with the number of trees killed by 

mountain pine beetle. All estimated coefficients were 

significant at the 0.01 level for each of the three buffer zones (0.1 km, 0.5 km and 1.0 km radius from the 

home) and increased as the radius of the buffer zone 

increased; indicating the closer a damaged tree is to the 

house the greater the impact it will have on utility and 

price. Homeowners’ marginal WTP to avoid utility loss 

from mountain pine beetle damage within 0.1 km radius of a home was estimated to be approximately $648 

per tree. Similarly, within 0.5 km and 1.0 km radiuses 

the marginal WTP estimates were approximately $43 

and $17 per tree respectively.

The authors conclude that the combination of 

drought, overcrowded forests, and the mountain pine 

beetle epidemic indicate that the way forests are 

currently managed in Colorado is damaging the ecosystem. They also argue that the continued human 

actions that invite mountain pine beetle infestations reduce the stock of natural capital for future generations, 

at least in the short term. Forest restoration provides a 

range of social benefits obtained by homeowners and 

recreationists, both on and off site, as well as non-use 

values. This study suggests that an appropriate solution to restore forest health, minimize wildfire risk, and 

address the beetle problem may be to establish public 

programs to maintain healthy forests. It also suggests 

that partial funding for forest preservation is available 

from WUI residents through the form of taxation or 

cost share programs.
36 USDA Forest Service RMRS-GTR-275WWW. 2012.

Appendix C Table 1—Payne and others 1973. Economic analysis of the gypsy moth problem in theNortheast: II. 

Applied to residential property.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Pennsylvania/Maryland, mixed hardwood on residential properties

Homeowners

Gypsy moth (Lymantria dispar)

Non-native

Decrease in no. of trees 6 in. dbh

Contributed residential property value of trees

Hedonic pricing, hedonic price/acre or per tree

$1,175/acre or $270/tree loss with 15-pct decrease in number of trees

Appendix C Table 2—Wickman and Renton 1975. Evaluating damage caused to a campground by Douglas-fir 

tussock moth.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Stowe Reservoir campground in California, white fir

Recreationists

Douglas-fir tussock moth (Orgyia pseudotsugata)

Native

Decrease in no. of trees in campground

Recreation, aesthetic

Replacement and clean-up costs allocation, cost/tree

$56 aesthetic value/tree, $13 clean-up cost/dead tree, with 25trees killed 

total damage to campground is $1,725

Appendix C Table 3—Michalson 1975. Economic impact of mountain pine beetle on outdoor recreation.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Island Park area in Targhee National Forest (Idaho), lodgepole pine

Recreationists

Mountain pine beetle (Dendroctonus ponderosae)

Native

Increase in no. of visible dead trees

Recreation

Travel cost, consumer surplus/person-expenditure/person visitor days/person

$4.09 consumer surplus, $0.43 expenditure, and 1.2 days with a>30-pct 

infestation

Appendix C: Summary Tables of Nonmarket Economic Studies of Forest 

 Insect Pest Damages
USDA Forest Service RMRS-GTR-275WWW. 2012. 37

Appendix C Table 4—Moeller and others, 1977. Economic analysis of the gypsy moth problem in the Northeast: 

III. Impacts on homeowners and managers of recreation areas.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

New York/Pennsylvania, northeastern deciduous

(a)1 homeowners

(b)1 managers of recreation areas

Gypsy moth (Lymantria dispar)

Non-native

Presence of moth, defoliation, tree mortality

(i)2 control cost

(ii)2 financial loss

(iii)2 recreation loss

(i, ii, iii) sample average, (a-i, ii) annual public and commercial control costs 

and financial loss/household, (b-i, ii) annual control costs or financial loss 

for commercial and quasi-public campgrounds, (a-iii) annual person-days 

per household, (b-iii) annual person-days per campground

(a-i) $102 for public control, $240 for commercial control cost;

(a-ii) $125 with public control, $479 for commercial control financial loss;

(a-iii) 108 person-days with public control, 133 person-days with commercial 

control recreation loss;

(b-i) $441 for commercial campgrounds, $722 for quasi-public campgrounds 

control costs;

(b-ii) $249 for commercial campgrounds, $996 for quasi-public campgrounds 

in financial loss;

(b-iii) 161 person-days for commercial, 240 person-days for quasi-public, 

36,660 person-days for public campgrounds per unit in recreation loss 1

(a) and (b) refer to corresponding stakeholder.

2

(i), (ii), and (iii) refers to corresponding value type.

Appendix C Table 5—Leuschner and Young 1978. Estimating the southern pine beetle’s impact on reservoir campsites

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

East Texas Forest Service and Corps of Engineers campgrounds, mixed pine 

and hardwood

Recreationists

Southern pine beetle (Dendroctonus frontalis)

Native

Decrease in percent pine crown cover

Contributed recreation value of pine crown cover

Travel cost, consumer surplus/person/visit

$3.37 for Forest Service campgrounds, $2.44 for Corps of Engineers campgrounds 

per person with a 30-pct reduction in pine crown cover
38 USDA Forest Service RMRS-GTR-275WWW. 2012.

Appendix C Table 6—Walsh and Olienyk 1981. Recreation demand effects of mountain pine beetle damage to the 

quality of forest recreation resources in the Colorado Front Range.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Colorado Front Range, 6,000-8,000 ft elevation in Rocky Mountains, 

mixed-age ponderosa pine

Recreationists

Mountain pine beetle (Dendroctonus ponderosae)

Native

(a)1 decrease in no. of trees ≥6 in. dbh/acre

(b)1 decrease in average tree size

(c)1 increase in pct visible tree damage

(d)1 increase in pct dead and down trees on ground with slash

(e)1 increase in pct pest-caused treeless areas in acres

(f)1 decrease in no. of large tree ≥24 in. dbh

Contributed recreation value of indicator variable

(i)2 contingent valuation, annual willingness to participate in user-days

(ii)2 contingent valuation, consumer surplus/user-day

(iii)2 travel cost, no. of trips/person

(iv)2 travel cost, annual consumer surplus/person and per trip

(i) 370,000 user-days loss with 15-pct decrease in (a) on-site, 330,000 user-days 

loss with 15-pct decrease in (a) in nearview, 207,000 user-days loss with 

15-pct decrease in (a) in farview, 422,000 user-days loss with 15-pct decrease 

in (b), 3,045,000 user-days loss with 15-pct increase in (c) or (d), 317,000 

user-days loss with 15-pct increase in (e), 192,700 user-days loss with 15-pct 

decrease in (f);

(ii) $1.50/user-day loss at 178 trees/acre, or $1.70/user-day loss at 270 trees/acre 

with 15-pct decrease in (a);

(iii) 0.16 fewer trips per person with 15-pct decrease in (a);

(iv) $11.60/person, or $1.75/person/trip with 15-pct decrease in (a) 1

(a), (b), (c), (d), (e), and (f) correspond to indicator variable effect.

2

(i), (ii), (iii), and (iv) correspond to valuation method and estimate type.
USDA Forest Service RMRS-GTR-275WWW. 2012. 39

Appendix C Table 7—Walsh and others 1981a. Value of trees to residential property owners with mountain pine beetle 

and spruce budworm damage in the Colorado Front Range.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Colorado Front Range, 6,000-8,000 ft elevation in Rocky Mountains, mixed-age 

ponderosa pine

Homeowners, property owners

Mountain pine beetle (Dendroctonus ponderosae), western spruce budworm 

(Choristoneura occidentalis)

Both native

(a)1 decrease in no. of trees 36 in. dbh/acre

(b)1 decrease in average tree size

(c)1 expectation of 50-pct tree loss

(d)1 increase in pct visible tree damage

(e)1 increase in pct dead and down trees on ground with slash

(f)1 increase in pct pest-caused treeless areas in acres

(g)1 decrease in no. of large tree 324 in. dbh

Contributed property value of indicator variable

Contingent valuation, annual willingness to pay

$984/acre impr. lots, $578/acre unimpr.2 lots loss with 15-pct decrease in 

(a) on-site;

$602/acre impr. lots loss with 15-pct decrease in (a) on adjacent lots in near view;

$1,228/acre impr. lots, $783/acre unimpr. lots loss with 15-pct decrease in (b);

$2,351/acre impr. lots, $1,364/acre unimpr. lots loss with (c);

$7,034/acre impr. lots, $4,045/acre unimpr. lots loss with 15-pct increase in (d);

$907/acre impr. lots, $896/acre unimpr. lots loss with 15-pct increase in (e);

$61/acre impr. lots, $84/acre unimpr. lots gain with 15-pct increase in (f);

$918/acre impr. lots, $449/acre unimpr. lots loss with 15-pct decrease in (g) 1

(a), (b), (c), (d), (e), (f), and (g) correspond to indicator variable effect.

2

Improved lots (lots with buildings, primarily residences) is abbreviated “impr.,” while unimproved lots (lots with no 

buildings) is abbreviated “unimpr.”
40 USDA Forest Service RMRS-GTR-275WWW. 2012.

Appendix C Table 8—Walsh and others 1981b. Appraised market value of trees on residential property with mountain 

pine beetle and spruce budworm damage in the Colorado Front Range.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Colorado Front Range, 6,000-8,000 ft elevation in Rocky Mountains, 

mixed-age ponderosa pine

Real estate appraisers, homeowners, property owners

Mountain pine beetle (Dendroctonus ponderosae), western spruce budworm 

(Choristoneura occidentalis)

Both native

(a)1 decrease in no. of trees 36 in. dbh/acre

(b)1 decrease in average tree size

(c)1 expectation of 50-pct tree loss

(d)1 increase in pct visible tree damage

(e)1 increase in pct dead and down trees on ground with slash

(f)1 increase in pct pest-caused treeless areas in acres

(g) decrease in no. of large tree 324 in. dbh

Contributed property value of indicator variable

Contingent valuation, appraised market value

$209/acre impr. lots, $201/acre unimpr.2 lots loss with 15-pct decrease in 

(a) on-site;

$241/acre impr. lots loss with 15-pct decrease in (a) on adjacent lots in near view;

$1,155/acre impr. lots, $1,014/acre unimpr. lots loss with 15-pct decrease in (b);

$1,810/acre impr. lots, $1,492/acre unimpr. lots loss with (c);

$3,902/acre impr. lots, $2,715/acre unimpr. lots loss with 15-pct increase in 

(d) on-site;

$1,688/acre impr. lots, $2,445/acre unimpr. lots loss with 15-pct increase in 

(d) on adjacent lots in near-view;

$259/acre impr. lots, $848/acre unimpr. lots loss with 15-pct increase in 

(d) in far-view;

$493/acre impr. lots, $476/acre unimpr. lots loss with 15-pct increase in (e);

$102/acre impr. lots, $102/acre unimpr. lots gain with 15-pct increase in (f);

$251/acre impr. lots, $294/acre unimpr. lots loss with 15-pct decrease in (g) 1

(a), (b), (c), (d), (e), (f), and (g) correspond to indicator variable effect.

2

Improved lots (lots with buildings, primarily residences) is abbreviated “impr.,” while unimproved lots (lots with no 

buildings) is abbreviated “unimpr.”
USDA Forest Service RMRS-GTR-275WWW. 2012. 41

Appendix C Table 9—Loomis and Walsh 1988. Recreation and tree stand characteristics in the Colorado 

Front Range.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Colorado Front Range, 6,000-8,000 ft elevation in Rocky Mountains, mixed-age 

ponderosa pine

Recreationists

Mountain pine beetle (Dendroctonus ponderosae), western spruce budworm 

(Choristoneura occidentalis)

Both native

(a)1 decrease in no. of trees 36 in. dbh

(b)1 decrease in average tree size

Contributed recreation value of indicator variable

Contingent valuation, annual willingness to pay

(a) $145 benefit/visitor for camping with 200 trees/acre; $169 benefit/visitor for 

picnicking with 200 trees/acre; $161 benefit/visitor for backpacking with 

200 trees/acre; $302 benefit/visitor for hiking with 200 trees/acre; 

$321 benefit/ visitor for fishing with 200 trees/acre; $97 benefit/visitor for 

off-roading with 200 trees/acre;

(b) $210 annual benefit/visitor with avg. tree size at 10.5 in. dbh, $28 annual 

benefit/visitor with avg. tree size at 2.5 in. dbh; $13 annual benefit/visitor/day 

with avg. tree size at 13 in. dbh; $5 annual benefit/visitor/day with avg. tree 

size at 4 in. dbh 1

(a) and (b) correspond to indicator variable.

Appendix C Table 10—Walsh and others 1989. Net economic benefits of recreation as a function of tree stand density.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Colorado Front Range, 6,000-8,000 ft elevation in Rocky Mountains, mixed-age 

ponderosa pine

Recreationists

Mountain pine beetle (Dendroctonus ponderosae)

Native

Decrease in no. of trees 36 in. dbh/acre

Contributed recreation value of indicator variable

(i)1 contingent valuation, annual willingness to pay/person/day

(ii)1 travel cost, annual consumer surplus/person/day

(i) $24 net average benefit with 178 trees/acre and 2.7 days/trip;

(ii) $20 to $26 net average benefit with 178 trees/acre and 2.7 days/trip 1

(i) and (ii) correspond to valuation method and estimate type.
42 USDA Forest Service RMRS-GTR-275WWW. 2012.

Appendix C Table 11—Walsh and others 1990. Estimating the public benefits of protecting forest quality.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Colorado National Forests, mixed tree stands

Recreationists

Mountain pine beetle (Dendroctonus ponderosae), western spruce budworm 

(Choristoneura occidentalis)

Both native

Decrease in no. of trees 36 in. dbh/acre

Recreation, bequest, existence, option

Contingent valuation, annual willingness to pay/household

$52 average annual total value for 150 trees/acre where $14 is for recreation-use, 

$16 is for bequest, $11 is for existence, and $11 is for option

Appendix C Table 12—Jakus and Smith 1991. Measuring use and nonuse values for landscape amenities: a contingent 

behavior analysis of gypsy moth control.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Southcentral Pennsylvania and northcentral Maryland, urban residential, parks, 

and greenways

Homeowners

Gypsy moth (Lymantria dispar)

Non-native

Decrease in aesthetic quality (pct defoliation)

Aesthetics

Contingent valuation, annual willingness to pay/household

$254 to $534 for a private control program, $314 to $670 for a public control 

program

Appendix C Table 13—Haefele and others 1992. Estimating the total value of forest quality in high elevation 

spruce-fir forests.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

4,400 to 6,684 ft elevation in Appalachian Mountains of North Carolina, 

Tennessee, and Virginia, spruce-fir forests

Recreationists, general public

Balsam woolly adelgid (Adelges piceae)

Non-native

Increase in perceived visible damage (dead and dying trees)

Recreation, bequest, existence, and option

Contingent valuation, annual willingness to pay/household

$19 to $63 for forests near roads and trails, $22 to $107 for total forest
USDA Forest Service RMRS-GTR-275WWW. 2012. 43

Appendix C Table 14—Miller and Lindsay 1993. Willingness to pay for a state gypsy moth control program in New 

Hampshire: a contingent valuation case study.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

New Hampshire, northeastern deciduous forest

New Hampshire residents

Gypsy moth (Lymantria dispar)

Non-native

Increase in perceived visible damage

Total value

Contingent valuation, annual willingness to pay/household

$70 average annual, $43 median, or mean $16/acre, median $10/acre

Appendix C Table 15—Holmes and Kramer 1996. Contingent valuation of ecosystem health.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

4,400 to 6,684 ft elevation in Appalachian Mountains of North Carolina, 

Tennessee, and Virginia, spruce-fir forests

Recreationists, general public

Balsam woolly adelgid (Adelges piceae)

Non-native

Increase in perceived visible damage (dead and dying trees)

Existence and total

Contingent valuation, annual willingness to pay/household

$11 median existence value, $36 median total value

Appendix C Table 16—Thompson and others 1999. Valuation of tree aesthetics on small urban-interface properties.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Lake Tahoe Basin, California/ Nevada, Sierra-Nevada mixed conifer and Jeffrey 

pine forests

Homeowners

Unidentified

Unknown

Area weighted average of the average infection rating by plant group

Influence of tree care on property value

Hedonic pricing, hedonic price/ unit of infected trees

$26,390/unit, if infected trees are thinned then the value of the house will increase 

by 5 to 30% in value
44 USDA Forest Service RMRS-GTR-275WWW. 2012.

Appendix C Table 17—Haefele and Loomis 2001. Using the conjoint analysis technique for the estimation of passive 

use values of forest health.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Northeast, ornamental and trees in recreational areas; Northwest, fir stands and 

commercial timber; Southeast, commercial timber and wilderness areas

General public

Gypsy moth (Lymantria dispar), western spruce budworm (Choristoneura 

occidentalis), southern pine beetle (Dendroctonus frontalis)

Non-native, native, and native, respectively

Forest acreage infested after 15 years

Passive-use value

Contingent choice, price/acre to reduce infestation

$0.54/ acre/ person to reduce infestation

Appendix C Table 18—Kramer and others 2003. Contingent valuation of forest ecosystem protection.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Southern Appalachian Mountains, Virginia/ North Carolina/ Tennessee, high 

elevation spruce-fir forest ecosystems

General public

Balsam woolly adelgid (Adelges piceae)

Non-native

Presence of the insect along road and trail corridors and presence of the insect 

in the entire forest ecosystem

Total value

Contingent valuation, willingness to pay for forest ecosystem protection

Use value $4/person; Existence value $16/person; Bequest value $8/person; 

Total value $28/person

Appendix C Table 19—Asaro and others 2006: Control of low-level Nantucket pine tip moth populations: A cost 

benefit analysis.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Oglethorpe County, Georgia, Loblolly pine plantations

Land managers; plantation managers

Nantucket pine tip moth (Rhyacionia frustrana)

Native

Visible shoot damage after each moth generation and tree volume after 3-year study,

 in sprayed and unsprayed tree groups

Total value of pine tip moth control

Cost benefit analysis, total value of control/percent damage for a given interest rate

 Site 1 Site 2

Interest Rate 3% 5% 7% 3% 5% 7%

10–20% Damage $1,482 $852 $516 $586 $319 $183

20–30% Damage $2,530 $1,433 $857 $921 $497 $284

30–40% Damage NA NA NA $1,413 $755 $429
USDA Forest Service RMRS-GTR-275WWW. 2012. 45

Appendix C Table 20—Holmes and others 2006. Exotic forest insects and residential property values.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Sparta, New Jersey, individual hemlock trees and hemlock stands on residential 

properties

Homeowners

Hemlock woolly adelgid (Adelges tsuga)

Non-native

Four levels of hemlock defoliation: healthy < 25% defoliation, moderate 25-50% 

defoliation, severe 50-75% defoliation, and dead

Contributed residential property value of trees

Hedonic property, hedonic price/acre for a level of hemlock defoliation

Healthy: 0.66-8.08% increase in property value/ additional acre of hemlocks

Moderate: 0.96-4.76% increase in property value/ additional acre of hemlocks

Severe: inadequate data

Dead: 2.11% increase in property value/ additional acre of hemlocks

Appendix C Table 21—Huggett and others 2008. Forest disturbance impacts on residential property values.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

West Milford, New Jersey, individual hemlock trees and hemlock stands on 

residential properties

Homeowners

Hemlock woolly adelgid (Adelges tsuga)

Non-native

Four levels of hemlock defoliation: healthy < 25% defoliation, moderate 25-50% 

defoliation, severe 50-75% defoliation, and dead

Contributed residential property value of trees

Hedonic property, hedonic price/acre for a level of hemlock defoliation

Healthy: 0.66-8.08% increase in property value/ additional acre of hemlocks

Moderate: 0.96-4.76% increase in property value/ additional acre of hemlocks

Severe: inadequate data

Dead: 2.11% increase in property value/ additional acre of hemlocks
46 USDA Forest Service RMRS-GTR-275WWW. 2012.

Appendix C Table 22—Price and others 2010. Insect infestation and residential property values: A hedonic analysis of the 

mountain pine beetle epidemic.

Category Description

Region, forest type

Stakeholder

Insect

Origin

Indicator variable effect

Value type

Valuation method, estimate type

Estimated value

Grand County, Colorado, coniferous forests that provide goods and services to 

residents of the wildland-urban interface

Homeowners

Mountain pine beetle (Dendroctonus ponderosae)

Native

Number of trees killed by the mountain pine beetle

Contributed property value of forested areas

Hedonic property, marginal implicit price/killed tree within a Xkm radius of a home

$648/killed tree within 0.1km of a home

$43/ killed tree within 0.5km of a home

$17/ killed tree within 1.0km of a home
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The Rocky Mountain Research Station develops scientific information 

and technology to improve management, protection, and use of the 

forests and rangelands. Research is designed to meet the needs of 

the National Forest managers, Federal and State agencies, public and 

private organizations, academic institutions, industry, and individuals. 

Studies accelerate solutions to problems involving ecosystems, range, 

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community sustainability, forest engineering technology, multiple use 

economics, wildlife and fish habitat, and forest insects and diseases. 

Studies are conducted cooperatively, and applications may be found 

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