Playing with Fire: Endogenous Risk in Resource Management

Prescribed fire as a wildfire risk mitigation tool is receiving increasing attention in the United States after a century of emphasis on suppression. A dynamic economic model of prescribed fire use, precaution, and timing is developed and applied to three important policy issues: vegetation management on the wildland-urban interface; the effect of liability on vegetation management decisions; and the problem of heavy initial fuel loads after years of suppression and fuel accumulation. Numerical simulation results are presented as illustrations of the analytical model. Copyright 2004 American Agricultural Economics Association.