A reformulation of the cost Plus Net Value Change (C+NVC) model of wildfire economics

Abstract

The Cost plus Net Value Change (C+NVC) model provides the theoretical foundation for wildland fire economics and provides the basis for the National Fire Management Analysis System (NFMAS). The C+NVC model is based on the earlier least Cost plus Loss model (LC+L) expressed by Sparhawk (1925). Mathematical and graphical analysis of the LC+L model illustrates two errors in model formulation. First, suppression is incorrectly modeled as a model output. Second, suppression and primary protection are incorrectly modeled as negatively correlated. These errors are shown to be perpetuated by the contemporary C+NVC model and to have serious implications for the model's capacity to correctly identify the most efficient level of fire management expenditure. A corrected graphical representation of the C+NVC model is presented, which allows the most efficient level of fire management expenditure to be correctly identified.