The Costs of Critical Habitat or Owl’s Well That Ends Well
20 Pages Posted: 2 Nov 2020 Last revised: 11 Nov 2020
Date Written: September 11, 2020
When the Fish and Wildlife Service designated land in four counties of Arizona as “critical habitat” necessary for the protection of the endangered cactus ferruginous pygmy‐owl, property values dropped considerably. When the owl was later delisted, property values jumped back up. We use difference-in-difference and synthetic control designs to identify this effect with Zillow property value data. The results provide an estimate of the costs of this critical habitat designation, and they are considerable, contrary to the regulators’ position that critical habitat protection imposes no incremental costs beyond the original endangered species listing.
Keywords: ESA; property value; conservation; owls
JEL Classification: K32; K11; Q57; Q58
Suggested Citation: Suggested Citation