Journal of Forest Economics > Vol 27 > Issue 1

Are we underestimating the economic costs of wildfire smoke? An investigation using the life satisfaction approach

Benjamin A. Jones,
Suggested Citation
Benjamin A. Jones (2017), "Are we underestimating the economic costs of wildfire smoke? An investigation using the life satisfaction approach", Journal of Forest Economics: Vol. 27: No. 1, pp 80-90.

Publication Date: 0/4/2017
© 0 2017 Benjamin A. Jones
JEL Codes:Q51Q53I31C21
Wildfire smokeLife satisfactionDirect costsWillingness to payHealth


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In this article:
Life satisfaction approach in economics 
Wildfire smoke costs 
Empirical model 


Understanding the economic costs imposed by wildfire smoke is important to evaluating competing fire management approaches and setting appropriate mitigation budgets. The nascent literature on wildfire smoke costs has largely examined the indirect health costs associated with individuals’ exposure to smoke. However, this ignores the direct costs of wildfire smoke, that is, the costs that smoke creates by directly affecting an individual's utility. Direct costs may arise from smoke-induced changes in visibility of scenic amenities or disruptions to ecosystem services that individuals see value in preserving. For the first time, the life satisfaction approach is applied to estimate wildfire smoke economic costs faced by individuals from direct and indirect sources. Using nationally-representative data from the US Behavioral Risk Factor Surveillance System over 2006–2010, results suggest that US adults are willing to pay $373 [95% CI: $86.8, $659.2] to avoid one day of wildfire smoke over their county of residence within a six month period. Residents of rural areas are willing to pay $130 more to avoid one smoke day than urban residents. These results are higher than extant willingness to pay estimates of indirect smoke-induced health impacts, suggestive that the true costs of wildfire smoke are larger than previously estimated.