Journal of Forest Economics > Vol 18 > Issue 1

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

Leslie A. Richardson, , lrichardson@usgs.gov Patricia A. Champ, , pchamp@fs.fed.us John B. Loomis, , john.loomis@colostate.edu
 
Suggested Citation
Leslie A. Richardson, Patricia A. Champ and John B. Loomis (2012), "The hidden cost of wildfires: Economic valuation of health effects of wildfire smoke exposure in Southern California", Journal of Forest Economics: Vol. 18: No. 1, pp 14-35. http://dx.doi.org/10.1016/j.jfe.2011.05.002

Published: 0/1/2012
© 0 2012 Leslie A. Richardson, Patricia A. Champ, John B. Loomis
 
Subjects
 
Keywords
C31C36I12Q51Q53WildfireHealth effectsDefensive behavior methodWillingness to payCost of illnessStation Fire
 

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In this article:
Introduction
Methods for quantifying the economic cost of health damages
The Station Fire
Maximum simulated likelihood estimation of a health production function
Results
Limitations
Implications

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.

DOI:10.1016/j.jfe.2011.05.002