Amanda Ang

Abstract:

Wildfires are enormously costly events. Human causes account for more than 80\% of wildfire ignitions in the US. This paper examines the endogenous distribution of population as a driver of wildfire risk. I estimate an inverted U-shaped relationship between population density and wildfires: locations with medium population density have the highest ignition rates. I incorporate this relationship into a quantitative spatial model of Los Angeles metropolitan area. A combined reform of insurance and zoning regulations brings about a greater welfare improvement than either policy alone, leading to an estimated 8.24% reduction in damages from the Eaton and Palisade fires of January 2025.