Extreme Wildfires, Distant Air Pollution, and Household Financial Health

Xudong An, Stuart Gabriel and Nitzan Tzur-Ilan

No 24-01, Working Papers from Federal Reserve Bank of Philadelphia

Abstract: We link detailed wildfire burn, satellite smoke plume, and ground-level pollution data to estimate the effects of extreme wildfire and related smoke and air pollution events on housing and consumer financial outcomes. Findings provide novel evidence of elevated spending, indebtedness, and loan delinquencies among households distant from the burn perimeter but exposed to high levels of wildfire-attributed air pollution. Results also show higher levels of financial distress among renters in the burn zone, particularly those with lower credit scores. Financial distress among homeowners within the fire perimeter is less prevalent, likely owing to insurance payout. Findings also show out-migration and declines in house values in wildfire burn areas. The adverse smoke and pollution effects are salient to a substantial geographically dispersed population and add appreciably to the household financial impacts of extreme wildfires.

Keywords: Wildfires; Air Pollution; Consumer Credit; Financial Distress; Spending (search for similar items in EconPapers)
JEL-codes: D12 Q53 Q54 R23 (search for similar items in EconPapers)
Pages: 60
Date: 2024-01-03
New Economics Papers: this item is included in nep-ban, nep-env, nep-hea and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedpwp:97535

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DOI: 10.21799/frbp.wp.2024.01

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