Poster #79 - Perceived Wildfire Risk and Housing Markets: Evidence from Evacuation Orders in California

• In Event: Friday Poster Reception

Abstract

Over the past several decades, the combined forces of climate change, prolonged droughts, rapid population growth, urbanization, and land-use shifts have intensified both the frequency and severity of wildfires across the United States. Despite substantial investments in fire prevention and emergency response systems, wildfire damages continue to escalate—costing billions of dollars annually (Bayham et al., 2022). California stands at the forefront of this crisis. Driven by persistent drought conditions, the state has experienced an alarming rise in both the scale and destructiveness of wildfires.

CalFire identifies 2018 as one of the most catastrophic wildfire years in state history, marked by the Camp Fire and Mendocino Complex Fire. This upward trend continues in subsequent years: the August Complex Fire in 2020 becomes the largest wildfire in California, burning over one million acres, and the Dixie Fire in 2021 scorches more than 963,000 acres while destroying hundreds of structures and threatening thousands more. Among the top 20 most destructive wildfires in California history, 75% have occurred since 2015. These fires collectively destroy approximately 66,810 structures, with 86% of that destruction taking place between 2015 and 2025. Projections indicate this trajectory will persist under ongoing climate change scenarios (Hurteau et al., 2019; Syphard et al., 2024).

Wildfires inflict immediate damage in the form of fatalities, injuries, loss of homes and infrastructure, and contamination of vital natural resources such as soil, water, and air (Kan-Rice, 2025). Beyond these acute impacts are long-term and indirect consequences—such as job loss, mental health deterioration, and reduced economic opportunity. While environmental losses are often difficult to quantify, the impact on residential property values is more readily observed and measured. This project aims to evaluate how wildfire risk perceptions shape housing market outcomes in California, and whether these effects persist. We conduct a spatial-temporal analysis using a novel dataset that includes evacuation orders for all California wildfires over 75 acres from 2000 to 2022. These data include shapefiles of evacuation boundaries, along with fire-specific details and evacuation types (warning, voluntary, or mandatory). We merge this with residential transaction data for the years 2003 to 2021. Our empirical strategy employs dynamic difference-in-differences estimators (Callaway and Sant’Anna, 2021) to measure how different evacuation intensities affect housing values and the duration of these effects. As expected results, we quantify the impact of wildfire risk on home sales values across California and estimate potential heterogeneous impacts of this risk across demographic and socioeconomic groups. 

Author

• Mehdi Nemati, University of California, Riverside
  Presenting Author