To address these empirical concerns we create a panel data set of the determined cause of individual fires in the NFIRS database between 1986 and 2010.
Using NFIRS data, we conduct three main empirical exercises.
We suspect our estimate of [beta] in Equation (1) will be biased downward if detection and subsequent reporting of arson by local fire departments to NFIRS is systematically correlated with local housing market conditions.
where m and t index MSA and calendar-month as before, but i now represents an individual fire reported in the NFIRS database.
On average, 98.4 fires were reported per 1 million MSA residents in the NFIRS database each month between 1986 and 2010, of which 6.5 fires were due to arson.
There were 59,745 and 85,944 unique MSA-by-month observations in the UCR and NFIRS data, respectively, which is the unit of observation for the analysis.
We report coefficients in the third and fourth columns of Table 2 from re-estimating Equation (1) using instead monthly arson offenses reported in the NFIRS database.
While arson estimates obtained using the NFIRS data were shown to have less reporting bias than using UCR data, such estimates may still be downward biased if either decreases in local house prices resulted in fewer resources to investigate potential arson offenses, or more individuals are successful in disguising their intentional behavior as accidental when house prices decrease.
To address these potential concerns, we re-estimate Equation (1) alternatively defining the dependent variable as the total number of fires per 1 million MSA residents in the NFIRS database regardless of cause determined by fire investigators.
The above aggregate estimates of the per capita rate of arson and total fires could still be downward biased if fire investigators systematically underreport arson and fires to the NFIRS database when house prices decrease.
To address potential reporting bias, we estimate the conditional change in probability an individual fire reported to the NFIRS is determined by fire investigators to occur due to arson.