1. Coqui frogs and the decline of property values on the island of Hawaii Kimberly Burnett University of Hawaii at Manoa Department of Economics Brooks Kaiser Gettysburg College/UH Manoa Department of Economics

2. Project overview  Objective: Does the presence of the frog on or near a property result in a decline in that property’s value?  NOTE! This study considers only impact on property value, thus should be considered a lower bound estimate of actual economic costs from the frog  Analysis does not include: Impacts to agriculture, horticulture industries (double hit in reduced sales and increased costs) Any potential ecological damages

3. Model  Built a model to explain Hawaii County property prices that depends on: Square footage, how many rooms How many acres Strength of market (proxy with mortgage rate) Year of sale District (Puna, S. Hilo, N.Hilo, Hamakua, N. Kohala, S. Kohala, North Kona, South Kona, Kau) Zoning class (agriculture, apartment, unimproved residential, improved residential, conservation, industrial, resort, commercial) Finally, presence or absence of frog (within 500 m of the property)

4. Data  Hawaii County  Sample: 50,033 real estate transactions between 1995-2005 Omit sales that fall within the lowest or highest 1% of prices 37,228 properties, each changes hands 1–6 times (average 1.2 times), for a total of 46,405 transactions  Frog complaints registered to USDA/APHIS Wildlife Services Use GIS to match verified frog complaints 1997-2001 to property transactions Generate indicator variables for whether property is within 500m of previous complaint

5. Outlier, excluded (over 100,000 ac)

6. District Level Summary Statistics DistrictNumber of Transactions Average % of properties within 500 m of frog complaint Puna20,91417% South Hilo4,16337% North Hilo4120 Hamakua6832% N. Kohala1,4521% S. Kohala4,59521% N. Kona7,87133 % S. Kona1,42714% Kau5,0490

7. Puna Close-up Frogs within 500 m Transactions Frogs within 800 m

8. Results  Find that coqui frogs do impose localized damages to real estate values  The per-transaction reduction in value when frog complaints have been lodged within 500m appears to be about 0.16%, holding constant all other characteristics  Consider for a moment…0.16% may sound small, but Hawaii’s real estate is valuable!

9. Hawaii County  Median value of single family home: $411,500 (UHERO 2006)  34,175 owner-occupied housing units (DBEDT 2000)  0.16%* $411,500 = $658.40 per property* 34,175 homes = $22.5 million

10. Potential impacts to neighbor islands  Keep in mind…real estate values on Maui and Oahu are considerably higher than the Big Island  Maui County 0.16%*$703,500 = $1,125 per property*25,039 = $28.2 million  Honolulu County 0.16%*$632,200 = $1,012 per property*156,290 = $158.1 million

11. Conclusions  The presence of the coqui frog in Hawaii county has already begun to lower property values  An official complaint of the frog within 500m reduces property values on average 0.16%  If the frog spreads across all residential properties, direct damages to property values are estimated at a minimum of $22.5 million for Hawaii county, as much as $208 million for the state

12. 1997-20011997-2007

13. Mahalo funders and friends James Roumasset (Principal Investigator), UHM Economics Will Pitt, USDA/APHIS/WS Mindy Wilkinson, DLNR/DOFAW Earl Campbell, USFWS