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Atmospheric Pollution in Rapidly Growing Urban Centers: Spatial Policies and Land Use Patterns

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  • Efthymia Kyriakopoulou
  • Anastasios Xepapadeas

Abstract

We study the optimal and equilibrium distribution of industrial and residential land in a given region. The trade-off between the agglomeration and dispersion forces, in the form of pollution from stationary forces, production externalities, and commuting costs, determines the emergence of industrial and residential clusters across space. In this context, we define two kinds of spatial policies that can be used in order to close the gap between optimal and market allocations. More specifically, we show that the joint implementation of a site-specific environmental tax and a site-specific labor subsidy can reproduce the optimum as an equilibrium outcome. The methodological approach followed in this paper allows for endogenous determination of land use patterns and is shown to provide more precise results compared to previous studies.

Suggested Citation

  • Efthymia Kyriakopoulou & Anastasios Xepapadeas, 2014. "Atmospheric Pollution in Rapidly Growing Urban Centers: Spatial Policies and Land Use Patterns," DEOS Working Papers 1407, Athens University of Economics and Business.
    • Handle: RePEc:aue:wpaper:1407
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    1. Bayer, Patrick & Keohane, Nathaniel & Timmins, Christopher, 2009. "Migration and hedonic valuation: The case of air quality," Journal of Environmental Economics and Management, Elsevier, vol. 58(1), pages 1-14, July.
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    13. Kyriakopoulou, Efthymia & Xepapadeas, Anastasios, 2013. "Environmental policy, first nature advantage and the emergence of economic clusters," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 101-116.
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    Cited by:

    1. William Brock & Anastasios Xepapadeas, 2020. "Spatial Environmental and Resource Economics," DEOS Working Papers 2002, Athens University of Economics and Business.
    2. Michael Pflüger, 2020. "City Size, Pollution and Emission Policies," CESifo Working Paper Series 8448, CESifo.

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    More about this item

    Keywords

    Spatial policies; agglomeration; land use; atmospheric pollution; environmental tax; labor subsidy.;
    All these keywords.

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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