Risk externalities and the problem of wildfire risk

Shafran, Aric P.

doi:10.1016/j.jue.2008.05.001

Cited by 61 publications

(41 citation statements)

References 20 publications

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“…Leaky condominiums have been built in rainy Vancouver, with significant damage ensuing (Lee and Somerville 2009). Houses are built in fire zones using wood shingles despite the risk (Shafran 2008). It is therefore important, once one has acknowledged the frequency of copying in general, to consider when developers will copy good ideas and when they will not.…”

mentioning

confidence: 99%

Developers, Herding, and Overbuilding

DeCoster

Strange

2011

J Real Estate Finan Econ

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Recent years have seen the most pronounced turbulence that real estate markets have ever experienced. There have been wild swings in prices, a wave of foreclosures, countless failed investments, and massive overbuilding. This paper will be primarily concerned with overbuilding. Of the many forces that may have combined to produce this situation, the paper will focus on rational overbuilding carried out by developers whose decisions are made under uncertainty. We will establish the possibility of both statistical and reputation-based herding. The former refers to developers learning from each other, and so tending to copy. The latter refers to developers copying each other in order to reduce the probability of a loss of reputation that can result from making an unconventional choice.

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mentioning

confidence: 99%

Developers, Herding, and Overbuilding

DeCoster

Strange

2011

J Real Estate Finan Econ

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“…Nevertheless, I argue that the concept of risk externality, which is the focus of this section, is an underlying externality of various externality, especially, when, there is a risk dimension to the economic actors involved. Shafran (2008) highlights the fact that homeowners living in the wildland-urban interface must decide whether to create a defensible space around their house in order to mitigate the risk of a wildfire destroying their home. This implies that the externality under investigation in this context is risk externality.…”

Section: Risk Externalitiesmentioning

confidence: 99%

A Concise Note on Risk Externalities: A Critical Review

Fianu¹

2017

aeb

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This paper provides a review of the (risk) externality literature with the aim of identifying risk externalities arising from various interactions in the economics of environmental protection. In addition, various classification of externalities that exist have been explored. It highlights how such externalities might depend on the characteristics of economic interactions coupled with their impacts. The findings of this paper show that risk externalities result from risk mitigation and reduction activities, thereby, having varying degrees of impacts, and inducing inefficiency in economic systems. In addition, empirical investigations in the context of (risk) externalities have been provided.

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“…In terms of in-place shelter, the protection offered by a structure will depend on the fuels within the "home ignition zone" and the materials and design of the structure [70]. Residents in fire-prone areas are encouraged to create defensible space surrounding their homes, although in dense, fire-prone communities defensible space also depends on the actions of neighbors [71]. The use of flammable building materials increases likelihood of ignition, especially where flammable roofing material (or flammable debris on the roof) can be ignited by burning embers.…”

Section: Model Parametersmentioning

confidence: 99%

Modeling Evacuate versus Shelter-in-Place Decisions in Wildfires

2011

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Improving community resiliency to wildfire is a challenging problem in the face of ongoing development in fire-prone regions. Evacuation and shelter-in-place are the primary options for reducing wildfire casualties, but it can be difficult to determine which option offers the most protection in urgent scenarios. Although guidelines and policies have been proposed to inform this decision, a formal approach to evaluating protective options would help advance protective-action theory. We present an optimization model based on the premise that protecting a community can be viewed as assigning threatened households to one of three actions: evacuation, shelter-in-refuge, or shelter-in-home. While evacuation generally offers the highest level of life protection, it can place residents at greater risk when little time is available. This leads to complex trade-offs involving expected fire intensity, available time, and the quality and accessibility of in-place shelter. An application of the model is presented to illustrate a range of issues that can arise across scenarios.

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Risk externalities and the problem of wildfire risk

Cited by 61 publications

References 20 publications

Developers, Herding, and Overbuilding

Developers, Herding, and Overbuilding

A Concise Note on Risk Externalities: A Critical Review

Modeling Evacuate versus Shelter-in-Place Decisions in Wildfires

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