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The Effect of Mountain Pine Beetle Induced Tree Mortality on Home Values in the Colorado Front Range
Throughout the past decade American pine forests have experienced an epidemic of Mountain Pine Beetle (MPB) induced tree mortality. This thesis estimates the losses to home values caused by deteriorating forest quality in the Front Range Counties of Larimer and Boulder Colorado. We employ a repeat sales model that allows for region specific price indices, and non-linear age-related depreciation in home values. We use the time-invariant existence of pine forest near a home to overcome shortcomings in the measurement of MPB damage. We infer from temporal changes in the marginal "effect of pine trees near a home the approximate MPB "effect . We label this strategy the translating commodity approach. Using this strategy we are able to show that diminished forest quality causes forests to become a dis-amenity that negatively affects nearby home values. The total loss in 2011 home values due to their proximity to dying forest is estimated to be $137 million for all the homes in our sample. Such substantial losses may justify a forest management policy shift in order to better mitigate the risk of future MPB outbreaks.