The Price Of Silence: Markets For Noise Licenses And Airports
AbstractThis article presents a market design for the management of noise pollution created by aircraft traffic around airports. A local market for noise licenses allows noise generators to compensate noise victims and to meet social acceptability. We show that the market allows the market designer to implement the social planner's optimal allocation of flights as long as the latter does not put too high a weight in his/her objective function on firms' profits compared to the disutility of noise pollution. The fact that local representatives of noise victims may be strategic players does not fundamentally alter this finding. Because of the market auctioneer's information constraints, noise licenses are likely to distribute windfall gains to residents, which alters the urban structure in the long run.
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Bibliographic InfoArticle provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.
Volume (Year): 51 (2010)
Issue (Month): 4 (November)
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Other versions of this item:
- Thierry Brechet & Pierre M. Picard, 2008. "The Price of Silence: Markets for Noise Licenses and Airports," CREA Discussion Paper Series 08-08, Center for Research in Economic Analysis, University of Luxembourg.
- BRECHET, Thierry & PICARD, Pierre M., . "The price of silence: markets for noise licenses and airports," CORE Discussion Papers RP -2270, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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