EHS & Waste Management

Fire Safety – The Total Cost Of Fire In The United States

By November 20, 2019 No Comments

In response to an increased demand for data to aid decision making in fire safety and protection at the strategic and operational levels, this report by Department of Industrial and Systems Engineering, University at Buffalo Buffalo, NY, USA aims to provide data on the cost of fire in the United States to anyone with an interest in understanding or using this data.

This report is an update of a previous version (The Total Cost of Fire in the United States; NFPA, 2014b, which calculated the total cost of fire from 1980 to 2011) to provide more updated fire prevention, fire safety protection, and mitigation costs, with critical attention on estimating the economic impact of fire. In addition to providing updated methodologies for calculating the total cost of fire and its components, this report also identifies the areas where more future work is needed to improve the accuracy of estimating the total cost of fire.

The total cost of fire in the United States in 2014 was $328.5 billion, which was 1.9% of the U.S. Gross Domestic Product (GDP). The total cost of fire has been broken down into mutually exclusive categories of “expenditure” and “loss” and their sub-categories.

The expenditures constitute $273.1 billion (83.1% of total) and the losses constitute $55.4 billion (16.9% of total).

Some important highlights/findings from the analysis presented in this report are:

  • For each cost component and for all the years from 1980 to 2014, the actual dollar values as well as the 2014 dollar equivalent have been calculated. The 2014 dollar values are estimated from the actual values, using inflation rates in Table 4. The costs discussed in this summary are inflation-adjusted values.
  • Over the years 1980 to 2014, the total cost of fire has increased by 50.3%. However, over the same period of time, the total cost of fire as a percentage of U.S. GDP has decreased by 75.3% (from 7.6% in 1980 to 1.9% in 2014).
  • The fire safety costs in building construction ($57.4 billion) constitute the largest share (17.5%) of the total cost in 2014. Cost of fire grade products, the value of donated time of volunteer firefighters, and local fire department expenditure are the second, third, and fourth largest shares (16.4% at $54.0 billion, 14.3% at $46.9 billion, and 12.8% at $41.9 billion, respectively).
  • Due to a significant decrease in the number of deaths and injuries (civilian and firefighter) over the years 1980 to 2014, the cost of statistical deaths and injuries has decreased by 49.7% (from $62.4 billion to $31.4 billion) and 50.3% (from $18.1 billion to $9.0 billion), respectively.
  • This report documents multiple calculation methods for certain cost components. In such cases, we selected the most reasonable methods in which the data required was the most readily available. For example, five different methods are presented in Section 2.1 to calculate the value of donated time of firefighters. Since unavailability of accurate data hinders estimation of donated time, this report adopts the most reasonable method (in terms of data availability), which defines the value of donated time as the “cost to replace all volunteer fire departments with career,” rather than calculating “the actual value of the donated time of volunteer firefighters.” Adoption of this method should not be interpreted as an acknowledgment that eventually all volunteer firefighters would be replaced by career firefighters. The most important and the most difficult-to-estimate value of volunteer firefighters is their availability in the community and their readiness to respond at any hour of the day without being compensated.
  • This report defines the ‘economic impact of fire’ as the net monetary downstream effects of fires on the economy. In other words, the economic impact of fire is the sum of all indirect losses due to fire incidents, which is a subset of the total cost of fire. Indirect losses, especially from large loss fires, are expected to be significantly high and hence would impact the regional economy considerably. However, lack of adequate data on indirect losses makes it difficult to quantify the actual economic impact of fire.

To see a full copy of the report please click on this link:

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