Valuing the Welfare Cost of Forest Fires: a Life Satisfaction Approach
利用生活满意度方法，评估地中海地区森林火灾对居民福利的货币损失，发现火灾发生次数和过火面积均显著降低农村人口的生活满意度，每增加一次火灾和每多烧100公顷森林分别造成每户0.20欧元和2.03欧元的损失。
Sustainable natural resource management is at the core of the policy agenda, given the wide array of goods and services environmental resources generate, that significantly contribute to social welfare and productive capacity of modern economies. Likewise, there is a large policy interest in the monetization of the economic effects of environmental damages, to enable the design of response and mitigation strategies. This paper focuses on the valuation of the welfare losses from forest fires in the fire prone Mediterranean region applying the life-satisfaction approach. Detrimental effects on utility relate to morbidity, losses of marketed goods and impacts on forest goods and services. For our empirical investigation, we employ self-reported life satisfaction, income and other socio-economic information from the Eurobarometer Survey Series matched with data on the number and extent of forest fires at the regional level. To account for endogeneity, we instrument forest fire characteristics with the mean daily precipitation in the region during the fire season (April to September). Our sample covers Portugal, Spain, Italy and the Mediterranean provinces of France, and spans from 1986–1993 and 2001–2003. We find that both forest fire incidence and forest fire extent have a significant negative effect on individual welfare. We estimate the monetary loss from an additional fire incident to be €0.20 and the loss from burning an additional 100ha of forest at €2.03 per household respectively. Nevertheless, the negative effect of forest fires on life satisfaction is significant only for the rural population. Results therefore provide useful insights on the detrimental effects of forest fires at the regional level for different segments of the population that should be accounted for in policy formulation.