Assessing the benefits of reducing fire risk in the Wildland-urban interface: a contingent valuation approach

Abstract

Wildland-urban interface (WUI) residents in Michigan were interviewed using a contingent valuation protocol to assess their willingness-to-pay (WTP) for incremental reductions in the risk of losing their homes to wild-fire. WTP was elicited using a probability model which segments the risk of structure loss into “public” and “private” components.

Most respondents expressed positive WTP for publicly funded risk reduction activities. These respondents were characterized by tolerance for property taxes, perception of significant risk, high ranking of fire risk relative to other hazards, and high objective estimates of existing risk, and their WTP amounts were positively correlated with income and property value. Given that 97% of the respondents were insured against property loss, the large number of positive WTP responses suggests that substantial non-market and unreimbursed losses are experienced when structures are destroyed by wildfires.