Economic Analysis of Federal Wildfire Management Programs

Abstract

In the past two decades, there has been a significant increase in the number of acres burned by wildland fires and in the amount of money being spent to suppress these fires (Calkin et al. 2005a). With expenditures on suppression alone climbing to more than a billion dollars in four of the past seven years (2000–2006), the federal land management agencies are coming under ever increasing pressure by Congress and government oversight agencies to manage fire in a cost efficient manner. Economic analysis can benefit all fire-related programs and activities, and ignoring economic analysis in the wildland fire decision-making process, whether on a strategic or tactical level, can lead to wasted resources, poor outcomes, and higher-than-warranted expenditures. A full economic analysis of federal land management agencies’ wildfire programs would address activities undertaken: (1) before the fire, (2) during the fire, and (3) after the fire. The chapter begins with a description of the generally accepted model for evaluating wildland fire programs, the cost-plus-net value change or cost-plus-loss model. Though the cost-plus-loss model has been extended from its initial focus on presuppression to address all of these activities, most research to date has focused on a single aspect of the wildland fire program. We then turn to a discussion of where and how fire economics currently enters wildfire program decision making and indicate where additional applications are possible. We conclude with noting the issues and complications specific to conducting analyses of Federal wildfire management programs and suggestions for future research.