RT Journal Article
SR Electronic
T1 Adjacency Externalities and Forest Fire Prevention
JF Land Economics
JO Land Econ
FD University of Wisconsin Press
SP 162
OP 185
DO 10.3368/le.85.1.162
VO 85
IS 1
A1 Christian S. L. Crowley
A1 Arun S. Malik
A1 Gregory S. Amacher
A1 Robert G. Haight
YR 2009
UL http://le.uwpress.org/content/85/1/162.abstract
AB 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. (JEL Q23, Q28)