Effects of Aquatic Invasive Species on Home Prices: Evidence from Wisconsin
27 Pages Posted: 31 Aug 2013 Last revised: 31 Oct 2014
Date Written: August 27, 2013
Our purpose is to examine the extent to which lakefront property owners view the invasive species zebra mussels and water milfoil as a dis-amenities. While both the ecological and aesthetic impacts of milfoil are universally negative, it less clear how property owners might view zebra mussel infestations. An invasive species, zebra mussels negatively affect the local ecology, crowd out some native species, and deposit sharp shells on beaches. However, zebra mussels are also associated with increased water clarity, a reduction in suspended pollutants, and increased numbers of popular game fish, making this an empirical question.We use a hedonic model to estimate the impact of zebra mussel and water milfoil infestations on lakefront property prices in 17 counties in North Central Wisconsin (n=1072). We find a statistically significant, negative association between sales price and milfoil infestations that is consistent with previous studies. In contrast, zebra mussel infestations are associated with higher property sales prices. The results suggest that generating compliance with containment and mitigation strategies may be difficult as lake users do not perceive a cost to zebra mussel infestation.
Keywords: invasive species, zebra mussels, Eurasian water milfoil, property values
JEL Classification: Q51, Q57
Suggested Citation: Suggested Citation