Overview

Direct-burn and distant-smoke estimates describe different wildfire exposures, not competing measurements of one treatment. In the Camp Fire evidence, burn-zone consumers show larger delinquency changes and a falling average credit-card balance, while smoke-exposed accounts show higher delinquency, lower repayment, and rising balances; the samples, comparison areas, windows, and specifications differ. The chapter compares concentrated severity with dispersed reach, including a conditional New York population-scale imputation, and explains how insurance, tenure, credit capacity, health, and work pressures shape account outcomes. It concludes that exposure, unit, mechanism, and scale must remain attached to every comparison.

Learning outcomes

Direct-burn estimates can show greater per-household severity, while smoke reaches more households; the studies do not support one universal ranking.
A falling direct-burn balance and a rising smoke balance reflect different spending and repayment flows, not opposite welfare verdicts.
Applying Camp Fire estimates to 19 million New York-area residents produced an imputed $6 billion spending and $10 billion debt scenario, not observed totals.

Keywords

wildfireburnsmokeseverityreachcapacity

Two Fire Footprints, One Household Economy

This checkpoint connects the direct-burn and distant-smoke evidence into one comparison. The useful judgment is not which exposure is simply “worse,” because the studies measure different populations and mechanisms. It is how to compare geography, unit of outcome, per-household severity, population reach, and financial buffers without turning unlike estimates into one number.

Different exposures, different units

The direct-burn pathway begins with a property inside the fire footprint. In the Camp Fire analysis, consumers inside the burn area are compared with consumers one to five miles outside the perimeter. The reported direct effects include increases of about 2.2 percentage points in mortgage delinquency, 3.1 percentage points in credit-card delinquency, and 5.2 percentage points in personal-loan delinquency. Credit-card delinquency remains elevated through the two-year post-fire period described in the study. These households also show about $1,673 more in annualized spending and $2,345 more in annualized repayment, producing an estimated $2,367 decline in annualized credit-card balance.

The smoke pathway begins outside the burn area. In the main Camp Fire smoke comparison, households five to 30 miles from the boundary are divided by heavy and light pollution. The ordinary estimates show increases of 2.1 percentage points in credit-card delinquency and 3.5 percentage points in personal-loan delinquency; the instrumental-variable estimates show 2.8 and 3.7 percentage points. The smoke-exposed accounts also show roughly $549 to $775 more annualized spending, $630 to $787 less repayment, and about $1,002 to $1,157 more annualized balance, depending on the specification.

Placed side by side, the direct-burn delinquency estimates often look larger and the direct-burn balance response points downward while the smoke balance response points upward. But these are not two measurements of one treatment. Direct burn includes the consequences of living inside a damaged physical environment; smoke is isolated outside the burn zone to study pollution without direct property destruction. The direct-burn and smoke samples use different comparison areas, outcome windows, exposure definitions, and data structures. The numbers can illuminate the contrast, but they should not be averaged, ranked as if they came from one experiment, or used to declare a universal per-household hierarchy of harm.

Geography changes the scale of the result. Direct destruction is concentrated: only the households and addresses within the relevant footprint face the property loss measured in the burn analysis. Smoke can cover a much wider area. The Philadelphia Fed paper finds smaller smoke-related credit effects 30 to 100 miles from the Camp Fire and extends its analysis across Northern and Central California. The effect on one account may be less severe than the effect of losing a home, but the number of accounts in the affected geography can be much larger.

The paper's illustration using the 2023 Canadian wildfire smoke makes that population-scale point.

Published by DeepMox

FAQ

Can direct-burn and smoke estimates be compared as one score?

No. They use different populations, exposure definitions, comparison areas, outcomes, and windows, so their numbers should not be averaged or ranked as one treatment.

Why can smoke matter at population scale even with smaller effects?

Smoke reaches a wider geography, so a modest per-household effect can accumulate across many accounts; the New York calculation is an imputation, not an observed total.

What does financial capacity change after a wildfire?

It changes how the shock appears: higher-capacity borrowers may spend or repay, while constrained borrowers may reduce spending or fall behind; score and limit are proxies, not complete resilience measures.

Previous8 minWildfire Smoke and Credit Delinquency

Next8 minWildfire Smoke, Health, and Work

Comparing Wildfire Burn and Smoke Effects

Two Fire Footprints, One Household Economy

Different exposures, different units

FAQ