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The Economics of Wildfire in the United States

Author

Listed:
  • Jude Bayham

    (Department of Agricultural and Resource Economics, Colorado State University, Fort Collins, Colorado, USA)

  • Jonathan K. Yoder

    (School of Economic Sciences, Washington State University, Pullman, Washington, USA)

  • Patricia A. Champ

    (USDA Forest Service, Rocky Mountain Research Station, Fort Collins, Colorado, USA)

  • David E. Calkin

    (USDA Forest Service, Rocky Mountain Research Station, Missoula, Montana, USA)

Abstract

Wildfire is a natural phenomenon with substantial economic consequences, and its management is complex, dynamic, and rife with incentive problems. This article reviews the contribution of economics to our understanding of wildfire and highlights remaining knowledge gaps. We first summarize economic impacts to illustrate scale and trends. We then focus on wildfire management in three phases: mitigation before fires occur, response during fires, and response after fires. The literature highlights economic interdependencies and spillover effects across fire-prone landscapes as the source of economic inefficiencies and motivation for public institutional response. The literature illustrates the complexity of this problem with its myriad threads, including the trade-offs of living in fire-prone environments, the prospects for using controlled fire and mechanical fuel removal for reducing wildfire severity, the decision-making environment that firefighters face, and the economic consequences of wildfire smoke on health. Economics provides valuable insights, but fundamental questions remain unanswered.

Suggested Citation

  • Jude Bayham & Jonathan K. Yoder & Patricia A. Champ & David E. Calkin, 2022. "The Economics of Wildfire in the United States," Annual Review of Resource Economics, Annual Reviews, vol. 14(1), pages 379-401, October.
  • Handle: RePEc:anr:reseco:v:14:y:2022:p:379-401
    DOI: 10.1146/annurev-resource-111920-014804
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    Citations

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    Cited by:

    1. Ron Chan & Martino Pelli & Veronica Vienne, 2023. "Air Pollution, Smoky Days and Hours Worked," CIRANO Working Papers 2023s-15, CIRANO.
    2. Meier, Sarah & Elliott, Robert J.R. & Strobl, Eric, 2023. "The regional economic impact of wildfires: Evidence from Southern Europe," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    3. Wang, Yuhan & Lewis, David J., 2024. "Wildfires and climate change have lowered the economic value of western U.S. forests by altering risk expectations," Journal of Environmental Economics and Management, Elsevier, vol. 123(C).

    More about this item

    Keywords

    natural hazards; wildfire;

    JEL classification:

    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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