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Shadow market area for air pollutants

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Author Info
David Meintrup
Chang Woon Nam

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Abstract

This study identifies the shadow market area of air pollutants on the basis of the Gaussian plume model. Since pollutants are dispersed by wind, transport costs are irrelevant in its formation. Pollutant distribution on the ground level has an asymmetric bell shape in the wind direction. In addition to the linear functions, the exponential and quadratic shadow price functions are considered for the compensation of a health hazard to consumers, where the strict liability in the framework of the Coase theorem applies. The shadow market area for pollutants is shell shaped. This specific characteristic has an implication for market boundaries between polluters and their location decisions.

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Publisher Info
Article provided by Pion Ltd, London in its journal Environment and Planning B: Planning and Design.

Volume (Year): 36 (2009)
Issue (Month): 4 (July)
Pages: 664-681
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Handle: RePEc:pio:envirb:v:36:y:2009:i:4:p:664-681

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  7. Louis Kaplow & Steven Shavell, 1999. "Economic Analysis of Law," NBER Working Papers 6960, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Jacek Cukrowski & Manfred M. Fischer, 2000. "Theory of Comparative Advantage: Do Transportation Costs Matter?," Journal of Regional Science, Blackwell Publishing, vol. 40(2), pages 311-322. [Downloadable!] (restricted)
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  12. Katherine Falconer & Pierre Dupraz & Martin Whitby, 2001. "An Investigation of Policy Administrative Costs Using Panel Data for the English Environmentally Sensitive Areas," Journal of Agricultural Economics, Blackwell Publishing, vol. 52(1), pages 83-103. [Downloadable!] (restricted)
  13. Shaik, Saleem & Helmers, Glenn A. & Langemeier, Michael R., 2002. "Direct And Indirect Shadow Price And Cost Estimates Of Nitrogen Pollution Abatement," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(02), December. [Downloadable!]
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  15. Koop, Gary & Tole, Lise, 2004. "Measuring the health effects of air pollution: to what extent can we really say that people are dying from bad air?," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 30-54, January. [Downloadable!] (restricted)
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