Evaluating Alternative Prescribed Burning Policies to Reduce Net Economic Damages from Wildfire

We estimate a wildfire risk model with a new measure of wildfire output, intensity-weighted risk and use it in Monte Carlo simulations to estimate welfare changes from alternative prescribed burning policies. Using Volusia County, Florida as a case study, an annual prescribed burning rate of 13% of all forest lands maximizes net welfare; ignoring the effects on wildfire intensity may underestimate optimal rates of prescribed burning. Our estimated supply function for prescribed fire services is inelastic, suggesting that increasing contract prescribed fire services on public lands may produce rapidly escalating costs for private landowners and unintended distributional and "leakage" effects. Copyright 2007 American Agricultural Economics Association.