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

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.     

Multicultural Evaluation of the Performance of Contingent Valuation for Forest Fire Prevention

This article evaluates the ability of contingent valuation to measure the benefits received by several ethnic groups from a prescribed burning forest fire reduction program similar to President Bush's Healthy Forest Initiative. Reasons for refusing to pay higher taxes for the prescribed burning program were not statistically different between African Americans, Hispanics, and whites. Mean willingness to pay of whites was $400, whereas for African Americans it was $505, but the difference is not statistically significant. The results suggest a substantial statewide willingness to pay by whites and African Americans for forest fuel reduction projects using prescribed burning in California. (JEL Q26 , Q23 , J15 )     

Estimating the economic value of big game habitat production from prescribed fire using a time series approach

This paper demonstrates a time-series production technique to quantify the deer harvest and deer hunting benefits of controlled burns or prescribed fire. The time series regression model showed a statistically significant and positive effect of prescribed fire on deer harvest. The net economic value of the resulting additional deer hunting benefit was estimated using the Contingent Valuation Method at $ 98 per additional deer harvested. The initial deer hunting benefits of an additional 1,000 acres of prescribed burning are between $ 2,674 and $ 3,128 or $ 2-3 per acre. The costs of prescribed burning greatly exceed these benefits, suggesting that deer hunting benefits represent only a small part of the multiple use benefits of prescribed fire.     

Strategic Substitutes and Strategic Complements With Interdependent Demands

Strategic substitutes and complements have become standard tools of analysis in industrial organization. Bulow et al. (1985) original model which introduced these concepts focused on multimarket oligopoly. Building upon that model, this paper shows that there becomes not one but two strategic interaction terms if the demands between markets is interdependent and the firms compete in prices. This new model is applied to the telecommunications industry, where the local exchange carriers face competition from competitive access providers. The theoretical model shows the critical variables in the local exchange carriers' strategic pricing decision.     

The real action in health care

It's not taking place in the White House or Congress. The show to watch is the boisterous, free-market affair, precipitated by employers fed up with rising medical costs, and carried on by insurers and HMOs scrapping for turf.     

Computational Methods for Measuring the Difference of Empirical Distributions

This paper presents a simple computational method for measuring the difference of independent empirical distributions estimated by bootstrapping or other resampling approaches. Using data from a field test of external scope in contingent valuation, this complete combinatorial method is compared with other methods (empirical convolutions, repeated sampling, normality, nonoverlapping confidence intervals) that have been suggested in the literature. Tradeoffs between methods are discussed in terms of programming complexity, time and computer resources required, bias, and the precision of the estimate.     

Language–Related Differences in a Contingent Valuation Study: English versus Spanish

To test the similarity of English– and Spanish–speaking households responses to a contingent valuation survey, phone interviews were conducted in both languages regarding two forest fire prevention programs. While there were similar response rates, there were significant differences in the most frequent reasons given for refusing to pay. In the pooled logit model, the language intercept and bid interaction variables were insignificant in both programs. The likelihood ratio test of separate logit equations showed no statistical difference between English– and Spanish–speaking households responses to either program. Mean benefits reported by Spanish–speaking households were about one–third lower than English–speaking households, although the difference is not statistically significant.     

Improving the Connection between Theory and Empirical Analysis of Stated Preference and Conjoint Data: Improving Statistical Efficiency and Testing Robustness of Conjoint Marginal Valuations

We investigate the effect of panel estimators and sample weighting to improve efficiency of coefficient estimates and confidence intervals on marginal values. Panel estimators are appropriate because most conjoint studies have respondents rate multiple product profiles. Using a random effects ordered probit model increases significance levels on two forest health attribute coefficients and results in substantial tightening of confidence intervals on marginal values. To mitigate the effects of low response rate, we weight the returned surveys using Census data to match the sample to the population. Two of the four marginal values from this weighted ordered probit model are substantially different.