Strategic Behavior and the Environment > Vol 8 > Issue 1

Mitigating Wildfire Risk on Private Property with Spatial Dependencies

Michael H. Taylor, Department of Economics & Cooperative Extension, University of Nevada, USA,
Suggested Citation
Michael H. Taylor (2019), "Mitigating Wildfire Risk on Private Property with Spatial Dependencies", Strategic Behavior and the Environment: Vol. 8: No. 1, pp 1-31.

Publication Date: 24 May 2019
© 2019 M. H. Taylor
Public economics,  Economic theory,  Environmental economics,  Collective action,  Forestry
JEL Codes: D80Q54R20
Defensible spacerisk externalitiesnatural disasterswildfirepolicyeconomics


Download article
In this article:
Model Development 
Externalities and Homeowner’s Defensible Space Investment 
Community Equilibrium 
Policy Analysis 
Extensions: Home Value, Mortgage, and Insurance 


This article develops a theoretical model to analyze the impact of policies to promote defensible space — the most prominent wildfire risk mitigation strategy on private property — on the overall level of defensible space in a community when homeowners’ investment decisions are spatially dependent. The model describes how spatial dependencies can arise as a result of three externalities associated with defensible space: risk externalities, visual seclusion externalities, and externalities related to the interdependence of post-fire home values. The results suggest that the impact of policy on the equilibrium level of defensible space in a community will depend on the character of the spatial dependencies between neighboring homeowners’ investments, as well as on the pre-policy equilibrium. The results also emphasize the importance of financial considerations in homeowners’ defensible space investment decision.