Spatio-Temporal Modeling of Wildfire Risks in the U.S. Forest Sector

In the US forestry industry, wildfire has always been one of the leading causes of damage. This topic is of growing interest as wildfire has caused huge losses for landowners, residents and governments in recent years. While individual wildfire behavior is well studied (e.g. Butry 2009; Holmes 2010), a lot of new literature on broadscale wildfire risks (e.g. by county) is emerging (e.g. Butry et al. 2001; Prestemon et al. 2002). The papers of the latter category have provided useful suggestions for government wildfire management and policies. Although wildfire insurance for real estate owners is popular, the possibility to develop a forestry production insurance scheme accounting for wildfire risks has not yet been investigated. The purpose of our paper is to comprehensively evaluate broadscale wildfire risks in a spatio-temporal autoregressive scenario and to design an actuarially fair wildfire insurance scheme in the U.S. forest sector. Our research builds upon an extensive literature that has investigated crop insurance modeling. Wildfire risks are closely linked to environmental conditions. Weather, forestland size, aspects of human activity have been proved to be crucial causal factors for wildfire (Prestemon et al. 2002; Prestemon and Butry 2005; Mercer et al. 2007). In light of these factors, we carefully study wildfires ignited by different sources, such as by arson and lightning, and identify their underlying causes. We find that the decomposition of forestland ecosystem and socio-economic conditions have significant impacts on wildfire, as well as weather. Our models provide a good fit to data on frequency and propensity for fires to exist (e.g. R-square ranges from 0.4 to 0.8) and therefore provide important fundamental information on risks for the development of insurance contracts. A number of databases relevant to this topic are used. With the Florida wildfire frequency and loss size database, a complete survey of four measurements of annual wildfire risks is implemented. These four measurements are annual wildfire frequency, burned area, fire per acre and burned ratio at county level. In addition, the national forestry inventory and analysis (FIA) database, Regional Economic Information Systems (REIS) database and the national weather database have supplied forestland ecosystem, socioeconomic, and weather condition information respectively. With our spatio-temporal lattice models, impacts of environmental factors on wildfire and implications of wildfire management policies are assessed. Forestland size, private owners’ share of forestland, population and drought would positively contribute to wildfire risks significantly. Cold weather and high employment are found to be helpful in lessening wildfire risks. Among the forestland ecosystem, oak / pine & oak / hickory forestland would reduce wildfire risks while longleaf / slash & loblolly / shortleaf pine forestland would have a mixed impact. An interesting finding is that oak / gum / cypress forestland would reduce wildfire frequency, but would enhance wildfire propensity at the same time. Hurricanes could intensify wildfire risks in the same year, but would significantly decrease the next year’s wildfire risks. Meanwhile, cross sample validation verifies that our method can forecast wildfire risks adequately well. Since our approach does not incorporate any fixed-effect indicator or trend as in the panel data analysis (Prestemon et al. 2002), it offers a universal tool to evaluate and predict wildfire risks. Hence, given environmental information of a location, a corresponding actuarially fair insurance rate can be calculated.wildfires, forestry, weather, socio-economic, Spatio-Temporal autocorrelation, Risk and Uncertainty,

Spatio-Temporal Modeling of Southern Pine Beetle Outbreaks with a Block Bootstrapping Approach

Our study focuses on modeling southern pine beetle (SPB) outbreaks in the southern area. The approach is to evaluate SPB outbreak frequency in a spatio-temporal framework. A block bootstrapping method with zero-inflated estimation has been proposed to construct a statistical model accounting for explanatory variables while adjusting for spatial and temporal autocorrelation. Although the bootstrap (Efron 1979) method can handle independent observations well, the strong autocorrelation of SPB outbreaks brings about a major challenge. Motivated by bootstrapping overlapping blocks method in autoregressive time series scenario (Kunsch 1989) and block bootstrapping method of dependent data from a spatial map (Hall 1985), we have developed a method to bootstrap overlapping spatio-temporal blocks. By selecting an appropriate block size, the spatial-temporal correlation can be eliminated. The second challenge arises from the fact that the SPB spots distribution has a heavy weight on 0. To accommodate this issue, the zero-inflated models are adopted in the estimation stage. With our saptio-temporal block bootstrapping approach, impacts of environmental factors on SPB outbreaks and implications of pine forest management are assessed. Almost all the explanatory variables, including drought, temperature, forest ecosystem and hurricane, have been detected to have significant impacts. Forestland size and government share of forestland would positively contribute to SPB outbreaks significantly. Meanwhile, our method offers a way to forecast the frequency of future SPB outbreaks, given the current environmental information of a county.Southern Pinebeetle, Block Bootstrapping, Risk and Uncertainty,

Price of Anarchy for Non-atomic Congestion Games with Stochastic Demands

We generalize the notions of user equilibrium and system optimum to non-atomic congestion games with stochastic demands. We establish upper bounds on the price of anarchy for three different settings of link cost functions and demand distributions, namely, (a) affine cost functions and general distributions, (b) polynomial cost functions and general positive-valued distributions, and (c) polynomial cost functions and the normal distributions. All the upper bounds are tight in some special cases, including the case of deterministic demands.Comment: 31 page

Quasiparticle Levels at Large Interface Systems from Many-body Perturbation Theory: the XAF-GW method

We present a fully ab initio approach based on many-body perturbation theory in the GW approximation, to compute the quasiparticle levels of large interface systems without significant covalent interactions between the different components of the interface. The only assumption in our approach is that the polarizability matrix (chi) of the interface can be given by the sum of the polarizability matrices of individual components of the interface. We show analytically, using a two-state hybridized model, that this assumption is valid even in the presence of interface hybridization to form bonding and anti-bonding states, up to first order in the overlap matrix elements involved in the hybridization. We validate our approach by showing that the band structure obtained in our method is almost identical to that obtained using a regular GW calculation for bilayer black phosphorus, where interlayer hybridization is significant. Significant savings in computational time and memory are obtained by computing chi only for the smallest sub-unit cell of each component, and expanding (unfolding) the chi matrix to that in the unit cell of the interface. To treat interface hybridization, the full wavefunctions of the interface are used in computing the self-energy. We thus call the method XAF-GW (X: eXpand-chi, A: Add-chi, F: Full wavefunctions). Compared to GW-embedding type approaches in the literature, the XAF-GW approach is not limited to specific screening environments or to non-hybridized interface systems. XAF-GW can also be applied to systems with different dimensionalities, as well as to Moire superlattices such as in twisted bilayers. We illustrate the generality and usefulness of our approach by applying it to self-assembled PTCDA monolayers on Au(111) and Ag(111), and PTCDA monolayers on graphite-supported monolayer WSe2, where good agreement with experiment is obtained.Comment: More detailed proof of Add-Chi for hybridized states added in this versio