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Suppression of pest species via a native predator is a regulating ecosystem service that has the potential to limit crop damage and produce economic benefits. American kestrels Falco sparverius are widespread, highly mobile, generalist predators that hunt in human‐dominated habitats and have the potential to provide previously undocumented ecosystem services in agricultural landscapes. We hypothesized that kestrel activity associated with nest boxes and artificial perches acts to increase perceived predation risk that, in combination with direct predation, can reduce fruit‐eating bird abundances in orchards. We used counts and observations of fruit‐eating birds from fixed‐width transect surveys to investigate variation in bird abundances and to estimate sweet cherry loss in cherry orchards with and without active kestrel boxes. We also conducted a benefit–cost analysis of nest box installation and used regional economic modelling to estimate macroeconomic impacts of increased sweet cherry production in Michigan, an important US fruit production region. Fruit‐eating bird counts were significantly lower at orchards with active kestrel boxes. Although kestrels used the perches in young orchard blocks and may benefit from them, the presence of perches did not have a significant effect on bird counts. Benefit–cost ratios for kestrel nest boxes indicated that for every dollar spent on nest boxes, $84 to $357 of sweet cherries would be saved from fruit‐eating birds. Regional economic modelling predicted that increased sweet cherry production from reduced bird damage would result in 46–50 jobs created and $2.2 million to $2.4 million in increased income for the state of Michigan over a 5‐year period. Synthesis and applications. Kestrel nest boxes in sweet cherry orchards provide a highly cost‐effective ecosystem service with potential reverberating benefits for a regional economy. Box occupancy rates will undoubtedly vary across landscapes and regions. However, costs to install and maintain boxes are small and, even if box occupancy rates are low, boxes can direct kestrel activity to particular places in agricultural landscapes where they can deter pest birds. Thus, the potential benefits for fruit crops greatly outweigh the costs of this pest management strategy.

Nest boxes for predators in agricultural regions are an easily implemented tool to improve local habitat quality with potential benefits for both conservation and agriculture. The potential for nest boxes to increase raptor populations in agricultural regions is of particular interest given their positions as top predators. This study examined the effects of cherry orchard nest boxes on the local breeding population of a declining species, the American Kestrel (Falco sparverius), in a fruit-growing region of Michigan. During the 2013–2016 study, we added a total of 23 new nest boxes in addition to 24 intact boxes installed previously; kestrels used up to 100% of our new boxes each season. We conducted temporally-replicated surveys along four roadside transects divided into 1.6 km × 500 m sites. We developed a multi-season occupancy model under a Bayesian framework and found that nest boxes had strong positive effects on first-year site occupancy, site colonization, and site persistence probabilities. The estimated number of occupied sites increased between 2013 and 2016, which correlated with the increase in number of sites with boxes. Kestrel detections decreased with survey date but were not affected by time of day or activity at the boxes themselves. These results indicate that nest boxes determined the presence of kestrels at our study sites and support the conclusion that the local kestrel population is likely limited by nest site availability. Furthermore, our results are highly relevant to the farmers on whose properties the boxes were installed, for we can conclude that installing a nest box in an orchard resulted in a high probability of kestrels occupying that orchard or the areas adjacent to it.