Too many buildings are built in areas of elevated fire danger.
Symptoms
Consequences
Causes
Negative Externality
Likelihood of fire
Proximity of buildings near each other - density
Damage per fire
Number of fires
Faster spread due to density and proximity of houses
Loss of life
Loss of property
Cost of emergency services
Health issues due to air quality, burns, other related injuries
Influx of individuals needing healthcare
Developer's business model
Demand
Preference to newer buildings
Area
Convenience/Locale
Profit
Lack of regulation
No fire code = building wherever
Multiple stakeholders
Marginal societal costs outweigh marginal benefits
Total societal cost > individual cost
Consumer/Consumer: Consumers who purchase homes increase the risk of fire spread in that area, causing a negative externality for their neighbors.
The area, population, and # of homes in places where human development borders or overlaps wildland have increased between 1990-2010. "Within the perimeter of recent wildfires (1990–2015), there were 286,000 houses in 2010, compared with 177,000 in 1990."]
Radeloff, V.C.,Helmers, D.P., Kramer, H.A., Mockrin, M.H., Alexandre, P.M., Bar-Massada, A., Butsic, V., Hawbaker, T.J., Martinuzzi,S., Syphard, A.D., and Stewart, S.I. (March 27, 2018). Rapid growth of the US wildland-urban interface raises wildfire risk. Proceedings of the National Academy of Sciences of the United States of America. 115 (13) 3314-3319. https://doi.org/10.1073/pnas.1718850115
"Consistent evidence documents associations between wildfire smoke exposure and general respiratory health effects, specifically exacerbations of asthma and chronic obstructive pulmonary disease. Growing evidence suggests associations with increased risk of respiratory infections and all-cause mortality."
Reid, C. E., Brauer, M., Johnston, F. H., Jerrett, M., Balmes, J. R., & Elliott, C. T. (2016). Critical Review of Health Impacts of Wildfire Smoke Exposure. Environmental health perspectives, 124(9), 1334–1343. https://doi.org/10.1289/ehp.1409277
Section 01: Externalities. (n.d.). Retrieved September 18, 2020, from https://courses.byui.edu/econ_150/econ_150_old_site/lesson_11.htm
"The U.S. Forest Service has estimated that there were about 45 million homes in the WUI in 2005, and projects that figure will increase by 40 percent by 2030. Headwaters Economics, a Montana-based research group that studies wildfire and land development, has reported that vast amounts of developable land in the U.S. are also fire-prone areas, meaning the potential exists for a further escalation of the impact of wildfire on the WUI."
Producer to consumer: Developers build and sell houses to consumers in fire-prone areas, increasing fire risk and fire management costs. The developers do not pay for these costs themselves, however, but instead pass it on to consumers.