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The housing boom and forest fires



This paper provides evidence that the combination of land-use restrictions and an increasing demand for housing can create incentives to induce forest fires as a means to circumvent regulation and increase the supply of land available for residential construction. I estimate the effect of the price of housing on the incidence of forest fires using Spanish data by region for 1991-2005. The results suggest that higher house prices led to a significant increase in the incidence of forest fires in a region. I also find that the increased incidence of forest fires led to a subsequent reduction in forest area and an increase in urban land area. This evidence supports the claims often found in the media that property speculators trying to build in forest land may be behind the recent increases in the incidence of forest fires in Mediterranean countries.

Suggested Citation

  • Libertad González Luna, 2007. "The housing boom and forest fires," Economics Working Papers 1060, Department of Economics and Business, Universitat Pompeu Fabra.
  • Handle: RePEc:upf:upfgen:1060

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    Forest fires; housing prices; land-use change;

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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