Reducing Social Losses from Forest Fires

Gregory S. Amacher, Arun S. Malik and Robert G. Haight


We evaluate two financial incentives to encourage nonindustrial forest landowners to undertake activities that mitigate fire losses: sharing of fire suppression costs by the landowner and sharing of fuel reduction costs by the government. First and second best outcomes are identified and compared to assess the effectiveness of these incentives in reducing social losses and fire suppression costs, under various assumptions about landowner behavior and information. We find that while cost sharing of fire suppression by the landowner invariably reduces social losses, this is not always true for government cost sharing of landowner fuel reduction. However, cost sharing of fuel reduction can yield larger reductions in social losses when fire risk is high. Both policies tend to induce larger reductions in both social losses and fire suppression costs when landowners engage in fuel reduction. We find that improving a landowner’s information about fire risk and fuel reduction can yield substantial reductions in social losses. (JEL Q23, Q54)

This article requires a subscription to view the full text. If you have a subscription you may use the login form below to view the article. Access to this article can also be purchased.

Purchase access

You may purchase access to this article. This will require you to create an account if you don't already have one.