Is Timber Insurable? A Study of Wildfire Risks in the U.S. Forest Sector Using Spatio-temporal Models

Xuan Chen, Barry Goodwin () and Jeffrey P. Prestemon

American Journal of Agricultural Economics, 2014, vol. 96, issue 1, 213-231

Abstract: In the U.S. forest products industry, wildfire is one of the leading causes of damage and economic losses. While individual wildfire behavior is well studied, new literature is emerging on broad-scale (e.g., county-level) wildfire risks. Our paper studies wildfire risks using crucial informational variables across both spatial units and time periods. Several statistical models are used to quantify the risks. We develop several maximum likelihood estimation methods to account for spatio-temporal auto-correlation in conditional risks. A group index insurance scheme is proposed, and its associated actuarially fair premium rates are estimated and presented. Implications for wildfire management policies are also discussed.

Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://hdl.handle.net/10.1093/ajae/aat087 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:96:y:2014:i:1:p:213-231.

Access Statistics for this article

American Journal of Agricultural Economics is currently edited by Madhu Khanna, Brian E. Roe, James Vercammen and JunJie Wu

More articles in American Journal of Agricultural Economics from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().