Tuesday, May 15, 2012

No answer 1

This second question is one that I will have a harder time answering and so will investigate as a thought experiment:

Is wildfire mitigation nonrival?

This questions stems from the previous question. Public goods are both nonexludable and nonrival. Unlike the concept of externalities they are rather well defined. The characteristic of nonrivalry is not absolutely black and white. (neither of the concepts that make up a public good are, but here we focus on the concept of rivalry). The source from the previous post defined public goods almost solely on their lack of rivalry. A good is a public good if the total amount of the good provided was consumed by every individual who consumed it. This is opposed to a private good where total consumption is the sum of the amount consumed by each individual. If the amount produced is 100, and multiple single individuals are able to consume 100 each, then the good produced is a public good due to the fact that it is nonrival.

This is the messiness of it all. Wildfire mitigation, if provided intentionally for a community as a whole, can be nonrival according to this definition. However, treatments to reduce wildfire hazard are spatial. They occur at specific locations in the landscape. People who are exposed to wildfire have property at specific locations within the landscape. The location of the treatment and the location of the property determine the reduction in hazard for a property. So if mitigation is provided generally in the form of treatment in specific locations the consumption of the mitigation is determined by the location of the property and the mitigation. The sum is somewhere in between a sum of consumption and the total amount produced. This is messy.

I was attempting to understand this as a matter of spatial externalities in previous work. As noted in the previous post, externalities are not necessarily public goods, and vice versa. If this is a matter of a continuum of public good rivalry then there are other major questions at hand rather than that of spatial externalities.

The concept that my advisor used to distinguish variation in the public good depending on location was one of quality. This is a challenging notion for me. What is quality? If a good is provided at 100 units, and location a gets 100 and location b gets 80, then is it truly quality, or quantity? If we assume the good is absolutely nonrival, then the quantity by definition cannot vary. The only thing remaining is good quality.

So, if the reduction in individual loss that results from the provision of a public good such as wildfire mitigation varies from location to location, is it nonrival? I don't know.

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