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Issue 89  | April 11 , 2014

 

Economic Effects of Large Wildfires

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FOREST SERVICE SPENDING ON LARGE WILDFIRES IN THE WEST

2004-2008
Above: Forest Service spending on large wildfires in the West - Figure 1. 
Suppression costs of wildfires occurring 2004-2008
RESEARCH OBJECTIVES: 
 
 - Shed light on fire suppression spending as a starting point for understanding the economic impacts of large fires.
 
 - Investigate the relationship between fire suppression and local labor markets in the West.
 
 - Complete an in-depth investigation of the social and economic effects of the 2008 fire season in Trinity County, California.
 


KEY POINTS

Overall, large wildfires had a positive effect on local labor markets during the quarter of the fire; in the quarters after the fire, large wildfires caused increased volatility and seasonal shifts in local employment and wages.

Local labor market impacts from large wildfires varied among different types of economies; greater increases in employment occurred in counties that were economically reliant on recreation and government sectors while employment was negatively affected in counties reliant on traditional service sector jobs. 

Large wildfires affected county level employment growth differently by sector. Natural resources, trades, information and finance sectors exhibited positive employment growth during large wildfires. Construction, manufacturing, professional services, education and health, and leisure and hospitality sectors exhibited less than expected employment growth during large wildfires. 

The amount of money that is spent locally during wildfire suppression had a significant effect on the labor market changes that occurred during the wildfire. On average, for every million spent locally, local employment increased one percent. Local business capacity for suppression work can be measured by the number of suppression-related vendors active in the county prior to the fire. 

The Forest Service spent 39% of total suppression expenditures on contracted services, a greater amount than any other suppression expenditure category. The large majority of suppression contract dollars still when to non-local vendors as capture of fire suppression contracts is concentrated in a few areas in the West. 

Large wildfires in Trinity County, California, in 2008 caused dynamic varied economic impacts including short-term suppression spending that helped some local businesses avoid closing; but natural resource wages and employment declined following the fires. 

READ THE WORKING PAPER
READ THE JFSP FINAL REPORT
PROJECT WEBSITE & MORE...
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