Adjacency externalities and forest fire prevention.
Authors:
Crowley, Christian S.L. Malik, Arun S. Amacher, Gregory S. Haight, Robert G. USDA, FS
Source:
Land economics. 2009 Feb., v. 85, no. 1, p. 162-185.
NALT Subjects:
forest fire management landowners attitudes and opinions simulation models costs and returns econometric models
Issue Date:
Feb-2009
Abstract:
This paper models landowner behavior on timberland subject to damage by fire. We examine how management decisions by adjacent landowners yield outcomes that diverge from the social optimum, and consider how this divergence depends on landowner preferences and information. We conduct a numerical simulation in which landowners interact through the effects of their fire prevention activities on a common risk of fire. The results reveal significant social inefficiencies related to externalities associated with private fuel treatment decisions. We consider a policy for aligning social and private decisions by requiring landowners to share the government's cost of fire suppression.
