Economically Optimal Wildfire Intervention Regimes
Jeffrey P. Prestemon, D. Evan Mercer, John M. Pye, David T. Butry, Thomas P. Holmes, and Karen L.
*The authors are, respectively, Research Forester, Research Economist, Ecologist, Economist, Research
Forester, and Research Economist. All are with Southern Research Station of the USDA Forest Service, PO
Box 12254, Research Triangle Park, NC 27709. Jeffrey P. Prestemon is the corresponding author: e-mail
firstname.lastname@example.org, tel. 919-549-4033.
Paper Presented at the American Agricultural Economics Association Annual Meeting, Chicago, IL,
August 5-8, 2001.
Wildfires in the United States result in total damages and costs that are likely to exceed billions of
dollars annually. Land managers and policy makers propose higher rates of prescribed burning and other
kinds of vegetation management to reduce amounts of wildfire and the risks of catastrophic losses. A
wildfire public welfare maximization function, using a wildfire production function estimated using a time
series model of a panel of Florida counties, is employed to simulate the publicly optimal level of prescribed
burning in an example county in Florida (Volusia). Evaluation of the production function reveals that
prescribed fire is not associated with reduced catastrophic wildfire risks in Volusia County Florida,
indicating a short-run elasticity of -0.16 and a long-run elasticity of wildfire with respect to prescribed fire
of -0.07. Stochastic dominance is used to evaluate the optimal amount of prescribed fire most likely to
maximize a measure of public welfare. Results of that analysis reveal that the optimal amount of annual
prescribed fire is about 3 percent (9,000 acres/year) of the total forest area, which is very close to the actual
average amount of prescribed burning (12,700 acres/year) between 1994-99.
Keywords: wildfire, prescribed burning, damages, stochastic dominance, Florida
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