The impact of wildfires on local property values in Wisconsin, United States

Wildfires pose a global challenge, inflicting widespread devastation on ecosystems, human well-being, and economies, with climate change intensifying this trend. Central to effective wildfire management policy is a clear understanding of the associated economic losses. This paper examines the impact of wildfires on local property values in Wisconsin, United States. The study utilizes detailed parcel transaction data, geographically linked to approximately 10,000 wildfires over recent years. Results indicate that wildfires negatively impact residential property values, reducing them by 2.3% within 5 km of a fire; conversely, they can positively affect agricultural property values by enhancing practices such as improved soil fertility; similar positive effects are observed for commercial properties, due to reduced perceived risks of future fires and increased demand for redevelopment; and the cause of wildfires also plays a role, as those from unknown origins do not significantly influence residential property prices. These findings underscore the need for targeted wildfire policies that consider nearby land use types and fire causes, particularly as climate change is expected to substantially increase wildfire frequency, intensity, and burned areas worldwide in the coming decades.