Choosing the Right Policy to Promote Defensible Space in the Wildland- Urban Interface: Evidence from Homeowners in Nevada

This article uses a unique data set on private homeowners’ observed investments in defensible space for 35 wildland-urban interface (WUI) communities in Nevada to analyze how the appropriate policy to promote defensible space, if any, should differ between WUI communities. To analyze this issue, we assess the extent to which three prominent explanations for homeowner underinvestment in defensible space hold in the WUI communities in our sample. We find evidence that homeowners are likely underinvesting in defensible space due to risk externalities in WUI communities whose predominant vegetation is associated with elevated wildfire hazard, that public expenditures on wildfire suppression capacity depress private investment in defensible space, but that public expenditures on hazardous fuel reduction promote private investment in defensible space in communities with high average fuel loads. We find no evidence that homeowners are underinvesting in defensible space because they systematically misjudge its efficacy, but we do find evidence that homeowners may not perfectly understand the biophysical determinants of their wildfire risk JEL Classification: D80, Q54, R20