Estimating contingent values for protection from wildland fire using a two-stage decision framework

The ongoing expansion of human populations into wildland areas dominated by flammable vegetation, and the concomitant increased frequency of uncontrol led wildfires that result in losses of property and human lives, has raised new questions about the optimal level of fire protection. The morphing of the problem conception from minimizing costs plus losses of natural resourc es to responding to the concerns of people whose homes are at risk has stim ulated fire protection planners to account for potential changes in people' s well-being beyond what is reflected by insured value. Knowing the perceiv ed value of an increase in collective (agency-provided) fire protection tha t achieves a risk reduction target can contribute much to policy debates on the restructuring and funding of fire protection infrastructure and fuel m anagement. To evaluate the utility of contingent valuation for assessing su ch risk reduction value, the value of collective fire protection at the wil dland-urban interface was assessed for residents of a Michigan jack pine fo rest. Seventy-five percent of the 265 residents interviewed chose to partic ipate in a hypothetical market for a 50% reduction in risk and, on average, were willing to pay over $57 a year for such risk reduction. Results were consistent with a two-stage decision model: (1) participation in the hypoth etical market for risk reduction, and (2) how much the risk reduction is wo rth. Homeowner risk perception and objectively assessed risk both influence d the probability of market participation. For market participants, willing ness to pay was related to property value and household income, suggesting that value at risk and ability to pay weigh heavily in this decision.