Ecosystem Services and Land Rental Markets: Producer Costs of Bat Population Crashes
Dale T. Manning, Amy W. Ando
Abstract
Nonmarket natural capital provides crucial inputs across the economy. We use land rental market data to calculate the welfare impacts of a change in an unpriced natural capital while accounting for spatial spillovers. We apply the welfare analysis to examine the cost of white-nose syndrome (WNS) in bats, which provide pest control services to agricultural producers. WNS, a disease that decimates bat populations, arrived in the United States in the mid-2000s. Leveraging the exogenous change in bat populations, we find that the loss of bats in a county causes land rental rates to fall by $2.84 per acre plus $1.50 per acre per neighboring county with WNS. Agricultural land falls by 1, 102 acres plus 582 acres per neighboring county with WNS. As of 2017, agricultural losses from WNS were between $426 and $495 million per year. These estimates of ecosystem service values can inform public management of society’s natural capital.