Homeowners willingness to pay to reduce wildfire risk in wildland urban interface areas: Implications for targeting financial incentives

Abstract

This study estimated homeowner's willingness to pay for public and private fuel reduction programs in wildland urban interface areas using a choice experiment implemented in California. A multinomial logit (MNL) model was estimated and indicated that homeowners living in subjectively perceived high-risk areas would pay for new wildfire risk mitigation programs. This suggests the importance of risk perceptions in adoption of risk mitigation behavior. Prior research has indicated that demographic factors influence risk perceptions. Therefore, the heterogeneity of homeowner preferences regarding wildfire risk perceptions and mitigation behavior, not explicitly revealed in the basic MNL model, was investigated using Latent Class (LC) and Random Parameter Latent Class (RPLC) models. Results from the LC model indicated that homeowners with lower income/education levels are more likely to ignore risk factors in making wildfire mitigation decisions, and generally prefer the status quo to paying the costs of new wildfire risk mitigation programs. Similar results were found in the RPLC model, except for gender is no longer significant. These results suggest that many low income/education level homeowners in the study area will require accessible and persuasive information on wildfire risk as well as significant financial incentives to undertake private wildfire risk mitigation efforts on their property and to support broader public efforts to protect communities. In contrast, many higher income/education households are more sensitive to risk factors when making wildfire mitigation decisions and would pay a substantial amount for public and private programs, making the existing cost share approach for these types of households workable.