Journal of Forest Economics > Vol 10 > Issue 3

Do nearby forest fires cause a reduction in residential property values?

John Loomis,
Suggested Citation
John Loomis (2004), "Do nearby forest fires cause a reduction in residential property values?", Journal of Forest Economics: Vol. 10: No. 3, pp 149-157.

Publication Date: 02 Nov 2004
© 0 2004 John Loomis
JEL Codes:Q23Q51Q54
Forest firesHedonic property analysisNon-market valuationRevealed preferenceRisk


Download article
In this article:
Introduction and problem statement 
Hedonic property method 
Study area 
Conclusion and policy implications 


Linear and semi-log hedonic property models identified a statistically significant decrease in property values in a town that was 2 miles from a major wildfire that burned 12,000 acres, and destroyed 10 houses. The house price drop in the unburned community is about 15%. This suggests that home buyers and sellers appear to revise upward their perceptions of fire risk after a major fire as well possibly reflecting some loss in forest amenity value in the broader geographic area surrounding the unburned town. These factors combine to reduce the desirability of living in the forest, reducing house prices.