Evaluating alternative prescribed burning policies to reduce net economic damages from wildfire 89

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. Key words: policy, prescribed fire, stochastic dominance, wildfire. Expenditures to prevent, control, and suppress wildfire in the United States have been ex-panding rapidly (Mutch 2002). For example, fire suppression expenditures by the USDA Forest Service rose from $160 million in 1977 to $760 million in 2005, when adjusted to 2003 dollars. Increases in wildfire costs have been attributed to: (1) increased wildfire severity and extent, caused by changes in weather and climate patterns; (2) aggressive wildfire sup-pression,1 resulting in fuel buildups in fire-prone landscapes; and (3) greater expendi-tures to protect a growing wildland–urban interface from wildfire (Aplet and Wilme