What are the costs of invasive species to properties?

Water Chestnut nutlets in the hand of a Watercraft Inspection Steward.

Preventing the spread of invasive species may seem like a moral and ethical requirement for some lake users. However, the financial benefits make it not only the right thing to do, but also the least expensive. It costs a lot less to prevent the spread of aquatic invasive species than it does to manage them once they’re established. What are these expenses? Direct costs include management, research and monitoring, and repairing damage that results (think of zebra mussels in a water intake). 

Indirect costs are harder to conceptualize. They include loss of biodiversity, impacts to tourism, and reduced property values. Since lake front properties are common in the Adirondacks, let’s examine this from a homeowner’s perspective.  

Imagine that you bought a camp on a clear pond in the northern Adirondacks. It cost a pretty penny, but you’ve been saving for it all your adult life. The water is pretty shallow, but it’s deep enough to swim, and full of bass and perch for fishing. A couple places are what you’d call ‘weedy’ with native eelgrass near the shoreline, but there isn’t much vegetation getting in your way. You worry about the potential spread of aquatic invasive species like Eurasian watermilfoil or variable-leaf milfoil because they could interfere with the activities you like to do. Well, I’ll just sell my camp if invasive species ever get in the way of my ability to have fun, you think, but then you wonder, how could invasive species impact the value of my home? There is no way to say for sure, but there are methods to make a guess. 

Hedonic valuation is a method by which economists can attempt to put a price on ecosystem components that are not bought and sold. It is helpful for determining how much particular parts of nature contribute to human satisfaction, since people are generally willing to pay more for the things that satisfy them more. For instance, diners are willing to pay more for a steak dinner at a classy restaurant than a drive-through hamburger. Substitute ‘steak’ with ‘clear lake’ and ‘hamburger’ with ‘milfoil-infested pond’ and it is possible to consider the different levels of satisfaction they may provide. While the food items can be valued easily by traditional economics because they get bought and sold, the clear lake, milfoil-infested pond, and their intangible environmental benefits are often not sold independently. Thus, they need to be valued by economists in another way. Hedonic valuation is a method of confronting the economists’ problem.  

Hedonic valuation uses data derived from prices that people have actually paid for market goods that can be impacted by environmental conditions (Boyd, 2011). This method of valuation works by controlling for variables among the features of similar properties. By doing this, it is possible to determine the increase or decrease in price called for by one variable, such as presence or absence of invasive species. 

Hedonic valuation has been used widely in the literature to determine the impact of green space, different land use classifications, water quality, viewsheds, and even Common Loons, on real-estate prices. In 2010, researchers in Vermont used hedonic pricing analysis to better understand the impacts of Eurasian watermilfoil density on lakefront home values. They found that home sale prices decreased by less than 1% up to 16%. Denser infestations had a higher impact on home values. This means it is beneficial to homeowners to manage and prevent further spread of milfoil, even in lakes where it is already established. 

Although existing statewide efforts to prevent the spread of invasive species may seem expensive, they are actually the least pricey path, and may prevent homeowners from incurring the intangible costs of an invasive species infestation in their lake. Economic benefits extend beyond homeowners, too, to include business owners who benefit from tourism, and tourists who can visit Adirondack waterbodies closer to home rather than traveling long distances to enjoy invasive species-free recreation.