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The hidden cost of wildfires: Economic valuation of health effects of wildfire smoke exposure in Southern California

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  • Richardson, Leslie A.
  • Champ, Patricia A.
  • Loomis, John B.
Abstract
There is a growing concern that human health impacts from exposure to wildfire smoke are ignored in estimates of monetized damages from wildfires. Current research highlights the need for better data collection and analysis of these impacts. Using unique primary data, this paper quantifies the economic cost of health effects from the largest wildfire in Los Angeles County's modern history. A cost of illness estimate is $9.50 per exposed person per day. However, theory and empirical research consistently find that this measure largely underestimates the true economic cost of health effects from exposure to a pollutant in that it ignores the cost of defensive actions taken as well as disutility. For the first time, the defensive behavior method is applied to calculate the willingness to pay for a reduction in one wildfire smoke induced symptom day, which is estimated to be $84.42 per exposed person per day.

Suggested Citation

  • Richardson, Leslie A. & Champ, Patricia A. & Loomis, John B., 2012. "The hidden cost of wildfires: Economic valuation of health effects of wildfire smoke exposure in Southern California," Journal of Forest Economics, Elsevier, vol. 18(1), pages 14-35.
    • Handle: RePEc:eee:foreco:v:18:y:2012:i:1:p:14-35
    DOI: 10.1016/j.jfe.2011.05.002
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    Cited by:

    1. Li, Zhengtao & Hu, Bin, 2018. "Perceived health risk, environmental knowledge, and contingent valuation for improving air quality: New evidence from the Jinchuan mining area in China," Economics & Human Biology, Elsevier, vol. 31(C), pages 54-68.
    2. Loureiro, Maria L. & Alló, Maria & Coello, Pablo, 2022. "Hot in Twitter: Assessing the emotional impacts of wildfires with sentiment analysis," Ecological Economics, Elsevier, vol. 200(C).
    3. Ambrey, Christopher L. & Fleming, Christopher M. & Manning, Matthew, 2016. "The hedonistic cost of the Black Saturday bushfires," 2016 Conference (60th), February 2-5, 2016, Canberra, Australia 235304, Australian Agricultural and Resource Economics Society.
    4. He, Guojun & Liu, Tong & Zhou, Maigeng, 2020. "Straw burning, PM2.5, and death: Evidence from China," Journal of Development Economics, Elsevier, vol. 145(C).
    5. Kochi, Ikuho & Champ, Patricia A. & Loomis, John B. & Donovan, Geoffrey H., 2016. "Valuing morbidity effects of wildfire smoke exposure from the 2007 Southern California wildfires," Journal of Forest Economics, Elsevier, vol. 25(C), pages 29-54.
    6. Ran Du & Qiyun Fang & Ke Liu, 2023. "Landscape Fire and Entrepreneurial Activity: An Empirical Study Based on Satellite Monitoring Data," Land, MDPI, vol. 12(7), pages 1-22, July.
    7. Benjamin A. Jones & Robert P. Berrens, 2021. "Prescribed Burns, Smoke Exposure, And Infant Health," Contemporary Economic Policy, Western Economic Association International, vol. 39(2), pages 292-309, April.
    8. Zhengtao Li & Henk Folmer, 2023. "Air pollution and perception-based averting behaviour in the Jinchuan mining area, China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 70(2), pages 477-505, April.
    9. Morello, Thiago & Anderson, Liana & Silva, Sonaira, 2022. "Innovative fire policy in the Amazon: A statistical Hicks-Kaldor analysis," Ecological Economics, Elsevier, vol. 191(C).
    10. Gellman, Jacob & Walls, Margaret & Wibbenmeyer, Matthew, 2022. "Wildfire, smoke, and outdoor recreation in the western United States," Forest Policy and Economics, Elsevier, vol. 134(C).
    11. Florec, Veronique & Pannell, David J. & Burton, Michael P. & Kelso, Joel & Mellor, Drew & Milne, George, 2012. "Economic analysis of prescribed burning for wildfire management in Western Australia," Working Papers 135305, University of Western Australia, School of Agricultural and Resource Economics.
    12. repec:ags:aaea22:336008 is not listed on IDEAS
    13. Ron Chan & Martino Pelli & Veronica Vienne, 2023. "Air Pollution, Smoky Days and Hours Worked," CIRANO Working Papers 2023s-15, CIRANO.
    14. Fotini Economou & Prodromos Prodromidis & Georgia Skintzi, 2019. "Large Fire Disaster and the Regional Economy: The 2007 Case of the Peloponnese," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 17(1), pages 7-31.
    15. Isabel Mendes, 2018. "Social risks of forest fires: a methodological proposal for their monetary evaluation," Working Papers Department of Economics 2018/02, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    16. Ambrey, Christopher L. & Fleming, Christopher M. & Manning, Matthew, 2016. "The hedonistic cost of the Black Saturday bushfires," 2016 Conference (60th), February 2-5, 2016, Canberra, Australia 235236, Australian Agricultural and Resource Economics Society.
    17. Gellman, Jacob & Walls, Margaret A. & Wibbenmeyer, Matthew, 2023. "Welfare Losses from Wildfire Smoke: Evidence from Daily Outdoor Recreation Data," RFF Working Paper Series 23-31, Resources for the Future.
    18. Maria L. LOUREIRO & Maria ALLO, 2018. "Los Incendios Forestales Y Su Impacto Económico: Propuesta Para Una Agenda Investigadora," Revista Galega de Economía, University of Santiago de Compostela. Faculty of Economics and Business., vol. 27(3), pages 129-142.
    19. Jagoda Adamus, 2023. "How Much Are Public Spaces Worth? Non-Market Valuation Methods in Valuing Public Spaces," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 2, pages 66-89.
    20. Zhengtao Li & Henk Folmer & Jianhong Xue, 2016. "Perception of Air Pollution in the Jinchuan Mining Area, China: A Structural Equation Modeling Approach," IJERPH, MDPI, vol. 13(7), pages 1-18, July.
    21. Meier, Sarah & Elliott, Robert J.R. & Strobl, Eric, 2023. "The regional economic impact of wildfires: Evidence from Southern Europe," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    22. Jones & McDermott, 2015. "Linking environmental management to health outcomes: a case study of the emerald ash borer," Applied Economics Letters, Taylor & Francis Journals, vol. 22(17), pages 1409-1414, November.

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    More about this item

    Keywords

    C31; C36; I12; Q51; Q53; Wildfire; Health effects; Defensive behavior method; Willingness to pay; Cost of illness; Station Fire;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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