There is increasing concern over the extinction of plants and animals resulting from modern land-use activities. Many jurisdictions have enacted legislation that limits these activities and directs resource managers to take mitigative steps. In this paper we demonstrate how standard economic analysis can be used to assess the costs of alternative conservation management strategies. The costs of a nest box program for the conservation of an endangered Australian arboreal marsupial, Leadbeater's possum (GymnobelideusleadbeateriMcCoy), are compared with the timber production value of the forests they inhabit. Nest boxes have been suggested as a mechanism to maintain the species and still allow timber harvesting to occur. In most scenarios nest boxes cost more than logging bans even under a variety of discount rates. Thus, given an exogenous policy decision to conserve Leadbeater's possum, the most efficient management strategy in this case is to not harvest the old-growth forests that are likely to support the species.