292 O’Bryan et al.: Economic Patterns in U.S. Arboriculture Arboriculture & Urban Forestry 2007. 33(4):292–299. Economic Patterns in U.S. Arboriculture Christopher M. O’Bryan, Thomas J. Straka, Scott R. Templeton, and Judith D. Caldwell Abstract. Arboriculture is a distinct industry that provides unique services to provide for the health and care of trees. It is a developing industry and this development leads to questions on how the industry is organized and operates. We define the industry, identify its size and growth patterns, discuss its structure and organization, describe its operation in terms of pricing and competition, and analyze whether it is dominated by large or small firms. This analysis provides important information for regulation and other policies related to arboriculture. The four largest arboricultural firms account for only 4% of combined industry receipts and the industry comprises nearly 82,000 establishments, employs approximately 160,000 workers, and earns annual gross receipts of nearly $9 billion. Key Words. Arboriculture industry; economic structure; industry analysis; utility services; vegetation management. Within the last century, the commercial practice of arboricul- ture in the United States has evolved from a few firms that offered specialized tree care services into an industry that consists of several thousand establishments. As the industry develops, certain questions become significant. First, what exactly is the arboriculture industry? It undoubtedly sells tree care services, but different firms offer various types of such service. Second, what are the size and growth patterns of the arboriculture industry? Third, what is the market structure, or organization, of the arboriculture industry? Structure refers to the number of firms in a market, determines how the industry operates, and relates to the degree of competitiveness in the market. These are critical issues when evaluating policy and regulations pertaining to arboriculture. The current literature does not include an analysis of these questions and this article is a first attempt to answer them. A definition of the arboriculture industry becomes complex when the full spectrum of tree-related services is considered over time. An early manual, The Tree Doctor (Davey 1901), distinguished arboricultural practices from other landscaping practices and emphasized individual tree care (Campana 1999). The Davey Tree Expert Company, established ap- proximately 1880, and the F.A. Bartlett Tree Expert Com- pany, established in 1907, are two of the earliest examples of tree care companies. Modern arboricultural practices include tree planting, transplanting, fertilizing, pruning, removal, insect and disease management, growth regulation, stump grinding, cabling and bracing, lightning protection, soil management, root pruning, and geographical information system mapping (Shigo 1991). The main objective of arboriculture is the health, appearance, and safety of individual trees. In 1928, Asplundh Tree Expert Company became the first of a different type of tree care company. It did not offer ©2007 International Society of Arboriculture residential tree care services, but exclusively offered power line clearance or vegetation management services (Campana 1999). Asplundh and several subsequent firms have contin- ued to specialize in this type of utility services. Utility services differs from arboriculture in that it deals with linear rights of ways rather than individual trees; it uses unit-cost contracts and not bid or flat-flat contracts; and tends to have a wider service area. These differences in objectives, services, contracts, and markets indicate that arboriculture and utility services are separate industries in the United States. This distinction is important because federal data sources often combine the two industries into a single indus- try called ornamental shrub and tree services (U.S. Census Bureau 2002; Wiatrowski 2005). STUDY METHODS The primary source of industry data in the United States is the U.S. Census Bureau and it does not separate arboriculture and utility services in its data collection. Instead, it collects data for a composite industry that it calls “landscaping services” under its North American Industrial Classification System (NAICS) code of 56173 (U.S. Census Bureau 2006). Land- scaping Services is then divided into two general types of businesses: “ornamental shrub and tree services” and “lawn and garden services” (U.S. Census Bureau 2004b). These subcategories are called a product line code, or PLC. Orna- mental shrub and tree services (PLC 38252) includes arborist services, ornamental tree and bush planting, pruning, bracing, spraying, removal, and utility-line tree trimming services (U.S. Census Bureau 2002). Figure 1 illustrates how the U.S. Census Bureau classifies data on the industry. It collects new data every 5 years on the number of establishments whose main business is ornamental shrub and tree service, the total receipts for all types of ser-
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