• The effect of wildfires, spruce bark beetles, and prescribed burns on residential property values in Alaska's Kenai Peninsula

      Reinker, Paul C.; Little, Joseph; Baek, Jungho; Greenberg, Joshua (2019-08)
      This study estimates the effect that forest fires, spruce bark beetle outbreaks, and controlled burns performed by fire management agencies have on nearby residential property values. Using the hedonic pricing framework, and ten years of house sales from south-central Alaska's Kenai Peninsula, this study found little evidence that wildfires and spruce beetle outbreaks have a significant effect on the final sale price of surrounding homes, but found that the controlled burns contribute to a decrease in surrounding home values. As Alaska's climate becomes warmer and drier, these disturbances threaten to increase in frequency and severity. Understanding how homeowners perceive fire risk and forest damage is increasingly important to fire management policy, as the behavior of residents can help limit both the cost from and incidence of wildfires. The study's findings suggest that homeowners are either insulated from, or indifferent to fire risk, but targeted burns of high-risk areas by fire managers could increase awareness and sensitivity to fire risk.
    • An exploration of own and cross-price elasticity of demand for residential heating in the Fairbanks North Star Borough

      Graham, Noelle J.; Little, Joseph; Baek, Jungho; Kennedy, Camilla (2019-05)
      The purpose of this study is to utilize community level household energy consumption data to determine the short-run own- and cross-price elasticity of heating oil and wood using the proportionally calibrated almost idea demand system model. Elasticity values can identify how residents of the Fairbanks North Star Borough will potentially alter home heating practices in response to a change in home heating oil price. Results indicate that values for own-price elasticity for oil is -0.259, with a 95% confidence interval of [-0.272, -0.246]. Based on predicted values a 1% increase in the price of heating oil is estimated to result in a reduction of 0.259% in the quantity of residential heating oil consumed by the average household. Cross-price elasticity estimates of wood with respect to a change in the price of oil is 0.198 with a 95% confidence interval of [0.171, 0.234]. Based on predicted values, a 1% increase in the price of oil is predicted to increase wood consumption by 0.198%. In addition, this study utilized a Monte Carlo Simulation with estimated elasticity parameters to predict the change in household level energy consumption of wood and heating oil given an increase in heating oil prices. Approximately 71% of households are predicted to decrease overall energy consumption. 83.5% of households are predicted to decrease oil consumption, and 57.3% of houses are predicted to increase wood consumption. Through evaluating household's energy consumption decisions in the face of changing prices, these results can inform effective air quality policies.
    • Wildfire in Alaska: the economic role of fuel treatments and homeowner preferences in the wildland urban interface

      Molina, Allen Christopher; Little, Joseph; Drury, Stacy; Baeck, Jungho; Greenberg, Joshua (2019-08)
      The challenges of increased temperatures, drier fuels and more intense wildfires are having a detrimental effect on Alaskans, especially those who live in the wildland urban interface. This area is defined by open wildlands being directly adjacent to homeowners. Human safety and property are exposed to increasing risk from these wildfires as climate-based changes affect the state. The rising costs of suppressing wildfires necessitate exploring potential solutions to minimize the impact on the state population and budget. The purpose of this study is to analyze the feasibility of fuel treatments to reduce suppression costs and provide incentives to private homeowners to create safer property spaces. An electronic survey and choice experiment were administered to 388 Alaskan homeowners to measure willingness-to-pay for different attributes associated with wildfire risk reduction variables, including nearby fuel treatments and overall neighborhood participation. Expenditure data were collected for large Alaskan wildfires between 2007 and 2015. An econometric cost model was developed to estimate the effect of nearby fuel treatments on final wildfire suppression expenditures. In both scenarios, there was a limited effect from public land fuel treatments on homeowner preferences and total suppression costs. Homeowners had a strong preference for thinned fuel treatments but did not prefer clear-cut tracts of land, even when compared to doing nothing at all. The survey provided significant insight into the preferences of Alaskan homeowners, including altruistic behavior, free riding behavior, self-assessment of risk, and the amenity values of surrounding vegetation. The costs of large Alaskan wildfires in the data set was mainly driven by protection level and number of burn days, and not by the presence or potential utilization of fuel treatments.