Conference Agenda

Climate change and the interlinked biodiversity loss highlight the need for effective management of natural capital. Forests, which provide critical ecosystem services such as carbon sequestration, habitat, local climate regulation, and recreational opportunities, are particularly vulnerable to climate-induced degradation. This study investigates the impact of forest ecosystem degradation on forest values and recreational behavior in Germany. We combine high-resolution spatial data on drought-induced forest loss with survey data from 2017 and 2025, including stated and revealed preference measures for forest recreation. Using the 2018–2022 extreme drought as a natural experiment, we exploit spatial variation in forest loss across Germany. We apply a difference-in-differences approach in a mixed logit model to estimate how forest degradation influences individuals’ preferences for specific forest structures, such as species and age composition. We further analyze changes in recreational behavior and the role of subjective perceptions of drought-induced damage.

Our results show that environmental degradation alters how people value forest structures. In areas experiencing higher levels of forest loss, individuals place higher value on familiar monocultures, which have become scarcer due to the drought-induced forest loss. This finding is consistent with place attachment theory. Further, respondents in high forest loss regions travel significantly longer distances (increase by 54\%) and spend more time in forests, indicating behavioral adaptation rather than reduced recreation. Overall, our study reveals substantial welfare implications of forest ecosystem degradation in terms of how it shapes individuals' forest preferences and recreational behavior.