TY  - BOOK
AU  - Baylis,Patrick
AU  - Boomhower,Judson
ED  - National Bureau of Economic Research.
TI  - Moral Hazard, Wildfires, and the Economic Incidence of Natural Disasters
T2  - NBER working paper series
PY  - 2019///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - December 2019; Hardcopy version available to institutional subscribers
N2  - This study measures the degree to which large public expenditures on wildfire protection subsidize development in harm's way. Using administrative firefighting data, we calculate geographically-differentiated implicit subsidies to homeowners throughout the western USA. We first examine how the presence of homes affects firefighting expenditures. These results are used to reconstruct the implied historical cost of protecting each home and to perform an actuarial calculation of expected future protection cost. The expected net present value of this subsidy can exceed 20% of a home's value. It increases with fire risk and decreases surprisingly steeply with development density. A simple model is used to explore effects on expansion of developed areas, density, and private risk-reducing investments. These results demonstrate how policy and institutions influence the costs imposed by a changing climate
UR  - https://www.nber.org/papers/w26550
UR  - http://dx.doi.org/10.3386/w26550
ER  -