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Forests produce significant non-market benefits by protecting residential and commercial real estate as well as all kinds of infrastructure (e.g. rail tracks, highways, power lines) against gravitational natural hazards such as avalanches, mudslides, and rockfall. The Austrian Federal Forests (Österreichische Bundesforste – ÖBf) recently commissioned a research project on the valuation of this ecosystem service by means of the replacement cost method and the hedonic pricing approach.

Based on the international literature, this paper focuses on a careful and realistic design of the baseline scenario with which the “marginal change” in ecosystem services can be assessed and valued. While the (current) management scenario is rather clear and reflects the approach pursued by the ÖBf (reasonably labeled as multifunctional forestry), the design of the baseline scenario (intensified commercial forestry) assumes a …