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Title: The effect of personal experience on choice-based preferences for wildfire protection programs
Author: Holmes, Tom; Gonzalez-Caban, Armando; Loomis, John; Sanchez, Jose;
Source: International Journal of Wildland Fire 22(2): 234-245
Publication Series: Scientific Journal (JRNL)
Description: In this paper, we investigate homeowner preferences and willingness to pay for wildfire protection programs using a choice experiment with three attributes: risk, loss and cost. Preference heterogeneity among survey respondents was examined using three econometric models and risk preferences were evaluated by comparing willingness to pay for wildfire protection programs against expected monetary losses. The results showed that while nearly all respondents had risk seeking preferences, a small segment of respondents were risk neutral or risk averse. Only respondents who had personal experience with the effects of wildfire consistently made trade-offs among risk, loss and cost and these respondents were willing to pay more for wildfire protection programs than were respondents without prior experience of the effects of wildfire. The degree to which people with prior experience with the effects of wildfire can effectively articulate an economic rationale for investing in wildfire protection to other members of their own or other communities facing the threat of wildfires may influence the overall success of wildfire protection programs.
Keywords: expected utility, heuristics, natural disasters, prospect theory, risk aversion, risk seeking.
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Holmes Thomas P., González-Cabán Armando; Loomis, John; Sánchez, José. 2013. The effect of personal experience on choice-based preferences for wildfire protection programs. International Journal of Wildland Fire 22(2): 234-245.
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