Is there more to trees than timber? Estimating the private amenity value of forests using a hedonic land model for combined agricultural properties

Forests offer a range of amenity values besides the production value of timber. We know from existing studies, that the trees' height and species affect the public's recreational values, but it is less clear how much the joy of owning a property with forest matters, and whether the joy depends on characteristics like tree height and species. In this paper, we estimate landowners' private amenity value of forests. We do this by estimating four hedonic land value models for different sizes of property. In the models, forests are described by the size of forest area with a canopy height above three meters, the size of forest area with a canopy height below three meters, mean canopy height, and the share of broadleaf forest. The value of an additional hectare of forest is predicted using the hedonic model and compared with the forest's expectation value based on accounting statistics for forest income, including hunting rents, discounted using an average real market interest rate of 1.7%. We find a difference of 6500–9900 EUR/ha between the estimated land value models and the production values for properties larger than 10 ha. We interpret this difference as the forest owner's willingness to pay for forest amenities in addition to the timber value. The results offer insight into the value of owning forests for the large majority of private forest owners who own small patches of land. They can be valuable in the design of land-use policies aiming to increase forest area and ecosystem service provision on private land that benefits both the public and the private owner.