We construct panel data on house prices and the determined cause of 4.8 million individual fires in the United States between 1986 and 2010 to test whether decreases in local housing market prices coincided with increases in arson. Since some insured homeowners may attempt to disguise the actual cause of fire as accidental, we also examine how decreases in local house prices are associated with changes in the total number of fires and the probability of determined causes of accidental fires. For the sample period, our results suggest that declines in local house prices coincided with increases in arson, the total number of fires, and the probability that fires were determined to occur due to arson and misuse. We provide further support for the existence of such an effect with empirical evidence that the relation between declines in house prices and arson is stronger in states that allow mortgage lender recourse.
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By: Michael D. Eriksen is an Assistant Professor of Finance, Rawls College of Business, Texas Tech University, Lubbock, TX 79409. James M. Carson is the Daniel P. Amos Distinguished Professor of Insurance, Department of Insurance, Legal Studies, and Real Estate, Terry College of Business, University of Georgia, Athens, GA 30602
Deliberate firesetting accounts for a large amount of deaths, injuries, and damage to property every year. Latest figures available for Great Britain indicate there were 35,900 deliberate fires in 2010–2011 (Department for Communities & Local Government, 2011b). In this period, deliberate fires were responsible for 72 fatalities and 1,700 non-fatal casualties (Department for Communities & Local Government, 2011b). The latest available figures for the economic impact of deliberate firesetting in England estimate the costs of arson in 2008 as £2.3 bn (Department for Communities & Local Government, 2011a). Comparing rates of deliberate firesetting across countries is difficult, but Australian estimates set the total cost of firesetting at AUS$1.6 bn annually (Rollings, 2008), whereas the annual direct cost due to property damage in the USA in the period between 2005 and 2006 was estimated as US$1.3 bn (Evarts, 2012). Despite this huge human and financial cost, theoretical understanding of firesetting is limited, especially in the case of adult firesetters (Gannon & Pina, 2010). In addition, there is a dearth of empirically validated methods of assessing and treating adult firesetters. To build up the body of literature on adult firesetting, researchers need validated measures with which to assess the fire-related attitudes of individuals, and their levels of fire interest. To date, the two most commonly used measures for this purpose have been the Fire Interest Rating Scale (FIRS; Murphy & Clare, 1996) and the Fire Attitude Scale (FAS; Muckley, 1997). These measures are designed to tap into an individual's degree of fire interest along with attitudes that might support the setting of fires. However, we know very little about the validity and reliability of these scales (Curtis, McVilly, & Day, 2012), although Taylor, Thorne, Robertson, and Avery (2002) did find that overall scores for both the FIRS and FAS showed improvements in a small sample of firesetters following treatment, suggesting, at least indirectly, a possible relationship with firesetting behaviour. Importantly, while elevated scores on a measure such as the FAS may indicate that an individual has problematic and potentially criminogenic attitudes of beliefs around fire and its use, clinicians interpreting their results have little to guide them as to what particular attitudes might require attention within treatment. The FAS includes a broad range of questions, some focusing on the use of fire to solve problems, others on whether fire safety measures are necessary, and others again on how typical it is for people to set fires or be accused of setting fires.
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