Mandated versus Voluntary Adaptation to Natural Disasters: The Case of US Wildfires

Patrick Baylis and Judson Boomhower

Journal of Political Economy, 2026, vol. 134, issue 3, 895 - 948

Abstract: Despite escalating losses in climate-related disasters, adoption of protective technologies and behaviors is limited by risk misperception, externalities, and insurance market frictions. One response to these market failures is to mandate these investments. We measure the effect of California’s wildfire building codes on own and neighboring structure survival using comprehensive data on US homes exposed to wildfires since 2000. Differences across jurisdictions and vintages reveal remarkable resilience effects of building codes. Codes also increase survival of neighboring homes by reducing structure-to-structure spread. We then develop and estimate a model of social benefits of mandatory building standards versus other adaptation policies.

Date: 2026
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