Estimating rates of substitution for protecting values at risk for initial attack planning and budgeting

Abstract With changes in land management planning and a new federal fire policy, increased emphasis has been placed on protecting a broader set of resource values such as those associated with sensitive species habitat or cultural resources. Fire managers have long needed a system for assessing values at risk across the landscape that can be implemented in accordance with the budgeting and appropriation process and that can be updated annually or every several years. A viable system has to be operational at a reasonable cost and it must support strategic planning and budgeting. Currently available valuation methods, in their entirety, can be costly and time consuming making them problematic for these purposes. Consequently, managers have become accustomed to assessing values at risk without the direct support of structured economic analysis. This paper discusses an approach (Marginal Attribute Rate of Substitution) to assessing values at risk for initial attack planning and budgeting. MARS is an attribute based method for estimating rates of substitution among fire protection attributes in a spatial context. It consists of and builds upon specific elements from well known and peer-reviewed valuation methods for resource valuation. As such, MARS relies upon stated preference, expert opinion, the hedonic price equation and other familiar procedures. The paper concludes with an empirical example of the application of MARS to a forested area in California. As the first construction of this approach it has the potential for further modification and refinement for those that may find it of interest.

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