POLLUTION MOBILITY, PRODUCTIVITY DISPARITY, AND THE SPATIAL DISTRIBUTION OF POLLUTING AND NONPOLLUTING FIRMS

ABSTRACT This paper first develops a model to characterize the equilibrium distribution of polluting and nonpolluting firms and then turns to the larger question of whether the equilibrium distribution is socially optimal. We find that the equilibrium distribution of polluting firms differs from the...

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Bibliographic Details
Published in:Journal of regional science 2016-09, Vol.56 (4), p.615-634
Main Authors: Wu, JunJie, Reimer, Jeffrey J.
Format: Article
Language:English
Subjects:
Costs
Economic geography
Equilibrium
Geography
Mobility
Optimization
Pollution
Pollution control
Pollution dispersion
Productivity
Spatial analysis
Spatial discrimination
Spatial distribution
Studies
Transportation
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Summary:ABSTRACT This paper first develops a model to characterize the equilibrium distribution of polluting and nonpolluting firms and then turns to the larger question of whether the equilibrium distribution is socially optimal. We find that the equilibrium distribution of polluting firms differs from the social optimum when they generate a large amount of stationary pollution and have much higher or lower productivity than clean firms. In these cases, conventional pollution control approaches generally do not bring about an optimal distribution. Consideration of transport costs along with productivity and pollution changes some of the classic results of the new economic geography literature.
ISSN:0022-4146
1467-9787
DOI:10.1111/jors.12266