Volunteer Fire Organizations and Volunteer Firefighters: an Economic Perspective and Valuation for the State of Montana
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University of Montana ScholarWorks at University of Montana Graduate Student Theses, Dissertations, & Professional Papers Graduate School 1993 Volunteer Fire Organizations and Volunteer Firefighters: An Economic Perspective and Valuation for the State of Montana John Ehren Pilsworth The University of Montana Follow this and additional works at: https://scholarworks.umt.edu/etd Let us know how access to this document benefits ou.y Recommended Citation Pilsworth, John Ehren, "Volunteer Fire Organizations and Volunteer Firefighters: An conomicE Perspective and Valuation for the State of Montana" (1993). Graduate Student Theses, Dissertations, & Professional Papers. 9284. https://scholarworks.umt.edu/etd/9284 This Thesis is brought to you for free and open access by the Graduate School at ScholarWorks at University of Montana. 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MUniversity ontana of VOLUNTEER FIRE ORGANIZATIONS AND VOLUNTEER FIREFIGHTERS: AN ECONOMIC PERSPECTIVE AND VALUATION FOR THE STATE OF MONTANA By “Jody” John Ehren Pilsworth B.A. in Economics, University of Montana Presented in partial fulfillment of the requirements for the degree of Master of Arts University of Montana 1993 Chairperson, Board of Examiners Dean, Graduate School Date UMI Number: EP72593 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. UMI Dissertation Publishing UMI EP72593 Published by ProQuest LLC (2015). Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code P ro test ProQuest LLC. 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106- 1346 Pilsworth, “Jody” John Ehren, M.A., May 1993 Economics Volunteer Fire Organizations And Volunteer Firefighters: An Economic Perspective And Valuation For The State Of Montana (191 pp) Director: Professor Michael H. Kupili In Montana, there are approximately 468 volunteer fire organizations and an estimated 8845 volunteer firefighters. The number of hours contributed by volunteers to the cause of fire protection is substantial. Within this study, the empirically determined economic value of volunteer firefighters to the State of Montana was modeled and calculated. Deriving accurate estimates of economic value was generated through two models using data collected from a survey of volunteer fire agencies in Montana. Method #1 took a direct approach by assessing the total time in hours contributed to local fire protection efforts by volunteers, imputing an hourly wage rate, and then multiplying that figure by the aggregate volunteer firefighter time. Method #2 took a statistical approach by estimating a econometric derived demand function for volunteer firefighters. The area underneath the estimated demand schedule was computed. A second measure of the economic value of volunteer services was then developed. Both models resulted in similar estimates. Method #1 resulted in an estimated economic value of S i2.4 million dollars while method #2 was 12.2% larger at $14.1 million. These figures are conservative due to both models' inability to capture certain volunteered hours as well as the omission of several fire training times. These economic service value measures reflect a considerable contribution by volunteer firefighters and indicate the significant positive return realized from a community's investment in local fire protection. Table of Contents Page Abstract ..................................................................... ii list of Figures ....................................................... vi List of Tables ................................................................................................ vii Acknowledgments ............................................................. viii Chapter 1 Introduction ............................................................................. 1 1.1 Background in Volunteerism ...................................................... 2 1.2 Proposed Research ........................................ 11 1.2.1 The Database ................................................................ 14 1.2.2 Methods and Models to Determine Economic Value . 16 1.3 Expected Research Findings ....................................................... 18 1.4 Thesis Organization ................................................................... 20 Chapter 2 Volunteer Fire Departments In Montana ................................... 22 2.1 Classification System for Fire Protection Agencies in the State of Montana ............................................................................. 26 2.1.1 Volunteer Fire Company ............................ 26 2.1.2 Volunteer Fire Department ........................................... 27 2.1.3 Rural Fire District ......................................................... 28 2.1.4 Fire Service Area .......................................................... 29 2.1.5 Paid Fire Department ............................................. 32 2.1.6 County Rural Fire Department .................................... 33 2.2 Structural, Organizational, and Legal Considerations .............. 34 2.2.1 Structural Dimensions .................................................. 34 2.2.2 Training and Equipment Requirements ....................... 36 2.2.3 Mutual Aid Agreements ................................. 38 2.2.4 Insurance Programs / ISO Ratings ............................. 39 2.2.5 Volunteer Firefighter's Compensation Act ................. 40 Chapter3 Literature ............................................................................ 43 3.1 Studies on Paid Firefighters and Government Provision of Fire Protection Services ....................................... 44 3.1.1 Demand and Supply Of Paid Fire Protection Services and Paid Firefighters .............................. 47 iii Page 3.1.2 Efficiency and Cost Concerns ...................................... 51 3.2 Volunteer Labor Resources and the Provision of Fire Protection Services .................................... 53 3.2.1 General Volunteerism Issues ........................................ 53 3.2.2 Volunteer Fire Agencies and Volunteer Firefighters: Structural and Organizational Characteristics ......... 55 3.2.3 Determining a Value for Volunteer Firefighter Service Hours .............................................. 59 3.2.4 Length of Service Award Programs and Rewarding Volunteer Firefighters ................................ 65 Chapter 4 Data Sources and Montana Descriptives ................................... 68 4.1 Specific Data Sources and Variables ......................................... 69 4.2 Potential Biases and External Validity ........................................ 71 4.3 Sample and State Descriptives .................................................... 80 4.3.1 Volunteer Firefighter Service Characteristics .............. 81 4.3.2 Montana Volunteer Fire Organization Descriptive Characteristics .................................................... 89 Chapter 5 Modeling Methods, Applications, and the Economic Value of Volunteer Firefighters in Montana .................................................. 98 5.1 Measuring Volunteer Firefighter Time Contributions .............. 99 5.1.1 Response Time ............................................................ 99 5.1.2 Volunteer Firefighter Training Time .......................... 104 5.2 The Value of Volunteer Firefighter Time .................................. 110 5.2.1 Wage Imputation Design ............................................ 115 5.2.2 Economic Value Method #1 ....................................... 119 5.2.3 Economic Value Method #2 ....................................... 124 5.2.3.1 Labor Demand Theory, Model Specification, and Volunteer Firefighters ........................... 125 5.2.3.2 Model Estimates and Results ........................ 129 5.2.3.3 Econometric Value Generation ..................... 138 5.2.4 Modeling Comments and Methods Comparison ....... 143 Chapter 6 Comments, Implications, and Future Research Potential 145 iv Page Appendix A The Montana Volunteer Firefighting Organization Survey Questionnaire .................................................................................. 151 Appendix B Variable Definitions for the Montana Volunteer Firefighting Organization Study ......................................... 159 Appendix C Montana Firefighting Organizations Arranged by Type and by County of Origin ........................................................................ 169 Bibliography ..................................... 185 V List of Figures Page Figure 1.1 - Hypothetical Derived Demand Schedule ........................... 18 Figure 3.1 - Categories of Occupational W orth ......................................... 61 Figure 3.2 - True Value Assessment