Do repeated wildfires change homebuyers' demand for homes in high-risk areas?

Julie M. Mueller; John D. Loomis; Armando Gonzalez-Caban

Treesearch

Do repeated wildfires change homebuyers' demand for homes in high-risk areas?

Informally Refereed

Authors:

Julie M. Mueller, John D. Loomis, Armando Gonzalez-Caban

Year:

2009

Type:

General Technical Report

Station:

Pacific Southwest Research Station

Source:

In: González-Cabán, Armando. 2009. Proceedings of the third international symposium on fire economics, planning, and policy: common problems and approaches. Gen. Tech. Rep. PSW-GTR-227 (English). Albany, CA: U.S. Department of Agriculture, Forest Service, Pacific Southwest Research Station. pp. 70-81

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Abstract

Unlike most hedonic studies that analyze the effects of a one-time event, this paper analyzes the effects of forest fires that are several years apart in a small geographical area. We find that repeated forest fires cause house prices to decrease for houses located near the fires. We test and reject the hypothesis that the house price reduction from the first fire is equal to the house price reduction from the second fire. The first fire reduces house prices by about 10%, while the second fire reduces house prices by nearly 23%, a statistically significant difference.

Parent Publication

Proceedings of the third international symposium on fire economics, planning, and policy: common problems and approaches

Keywords

Economic impacts of wildfires, hedonic property models, nonmarket valuation, temporal effect of wildfires, wildfire risk

Citation

Mueller, Julie M.; Loomis, John D.; González-Cabán, Armando. 2009. Do repeated wildfires change homebuyers' demand for homes in high-risk areas? In: González-Cabán, Armando. 2009. Proceedings of the third international symposium on fire economics, planning, and policy: common problems and approaches. Gen. Tech. Rep. PSW-GTR-227 (English). Albany, CA: U.S. Department of Agriculture, Forest Service, Pacific Southwest Research Station. pp. 70-81.