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Title: Reducing social losses from forest fires
Author: Amacher, Gregory S.; Malik, Arun S.; Haight, Robert G.
Publication: Land Economics. August 2006. 82 (3): 367-383
Abstract: We evaluate two financial incentives
to encourage nonindustrial forest landowners to undertake activities that mitigate fire losses: sharing of fire suppression costs by the landowner and sharing of fuel reduction costs by the government. First and second best outcomes are identified and compared to assess the effectiveness of these incentives
in reducing social losses and fire suppression costs, under various assumptions about landowner behavior and information. We find that while cost sharing of fire suppression by the landowner invariably
reduces social losses, this is not always true for government cost sharing of landowner fuel reduction. However, cost sharing of fuel reduction can yield larger reductions in social losses when fire
risk is high. Both policies tend to induce larger reductions in both social losses and fire suppression costs when landowners engage in fuel reduction. We find that improving a landowner's information
about fire risk and fuel reduction can yield substantial reductions in social losses.
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