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Economic Geography and the Effect of Environmental Pollution on Agglomeration

Author

Listed:
  • Lange Andreas

    (University of Maryland)

  • Quaas Martin F

    (UFZ Helmholtz Centre for Environmental Research)

Abstract

We study how local environmental pollution affects spatial patterns of economic activities when workers can migrate. Based on a New Economic Geography model, we analytically characterize the stability conditions for three different types of equilibria: symmetric spreading, partial and full agglomeration. We show that the extent of agglomeration crucially depends on the damages caused by local pollution. We thereby provide a unified framework for discussing different relationships between the extent of agglomeration and trade freeness that have been found in the literature.

Suggested Citation

  • Lange Andreas & Quaas Martin F, 2007. "Economic Geography and the Effect of Environmental Pollution on Agglomeration," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(1), pages 1-33, October.
    • Handle: RePEc:bpj:bejeap:v:7:y:2007:i:1:n:52
    DOI: 10.2202/1935-1682.1724
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    Citations

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    Cited by:

    1. Anastasios Xepapadeas & Efthymia Kyriakopoulou, 2009. "Environmental Policy, Spatial Spillovers and the Emergence of Economic Agglomerations," Working Papers 2009.70, Fondazione Eni Enrico Mattei.
    2. Dean M. Hanink, 2010. "Perspectives on Regional Change: A Review Essay on Handbook of Regional Growth and Development Theories," Growth and Change, Wiley Blackwell, vol. 41(1), pages 3-27, March.
    3. Schindler, Mirjam & Caruso, Geoffrey & Picard, Pierre, 2017. "Equilibrium and first-best city with endogenous exposure to local air pollution from traffic," Regional Science and Urban Economics, Elsevier, vol. 62(C), pages 12-23.
    4. Liwei Zhang & Chuanqing Wu, 2023. "The Impact of Smart City Pilots on Haze Pollution in China—An Empirical Test Based on Panel Data of 283 Prefecture-Level Cities," Sustainability, MDPI, vol. 15(12), pages 1-23, June.
    5. Bouwe R. Dijkstra, 2022. "Payments from Households to Distant Polluting Firms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(3), pages 681-715, July.
    6. Kyriakopoulou, Efthymia & Picard, Pierre M., 2021. "On the design of sustainable cities: Local traffic pollution and urban structure," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).
    7. Yingming Zhu & Yuan Li & Yi Wang & Lingfeng Li, 2021. "The Impact of Water and Soil Scarcity and Pollution on Industrial Agglomeration: Evidence from China," Sustainability, MDPI, vol. 13(10), pages 1-18, May.
    8. Kurita, Kenichi & Managi, Shunsuke, 2023. "New economic geography model with natural capital and migration congestion effect," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 635-641.
    9. Yi Ren & Yuan Tian & Chengqiu Zhang, 2022. "Investigating the mechanisms among industrial agglomeration, environmental pollution and sustainable industrial efficiency: a case study in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(11), pages 12467-12493, November.
    10. Fabio Grazi (AFD) & Henri WAISMAN & Jeroen van DEN BERGH, 2017. "A Simple Model of Agglomeration Economies with Environmental Externalities," Working Paper 6123ba60-086f-4618-9df3-a, Agence française de développement.
    11. Martin F. Quaas & Sjak Smulders, 2018. "Brown Growth, Green Growth, and the Efficiency of Urbanization," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 529-549, October.
    12. Rainald Borck & Michael Pflüger, 2019. "Green cities? Urbanization, trade, and the environment," Journal of Regional Science, Wiley Blackwell, vol. 59(4), pages 743-766, September.
    13. Rauscher, Michael, 2009. "Concentration, separation, and dispersion: Economic geography and the environment," Thuenen-Series of Applied Economic Theory 109, University of Rostock, Institute of Economics.
    14. Wu, JunJie & Segerson, Kathleen & Wang, Chunhua, 2023. "Is environmental regulation the answer to pollution problems in urbanizing economies?," Journal of Environmental Economics and Management, Elsevier, vol. 117(C).
    15. 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.
    16. Efthymia Kyriakopoulou & Anastasios Xepapadeas, 2010. "Environmental Policy and the Collapse of the Monocentric City," DEOS Working Papers 1021, Athens University of Economics and Business.
    17. Yoshihiro Hamaguchi, 2020. "Do pollution havens restrict tourism-led growth? Achieving sustainable tourism via a mix of environmental and tourism policies," Tourism Economics, , vol. 26(7), pages 1175-1196, November.
    18. Junsong Wang & Xinyue Ye & Yehua Dennis Wei, 2019. "Effects of Agglomeration, Environmental Regulations, and Technology on Pollutant Emissions in China: Integrating Spatial, Social, and Economic Network Analyses," Sustainability, MDPI, vol. 11(2), pages 1-20, January.
    19. Eppink, Florian V. & Withagen, Cees A., 2009. "Spatial patterns of biodiversity conservation in a multiregional general equilibrium model," Resource and Energy Economics, Elsevier, vol. 31(2), pages 75-88, May.
    20. Chui-Yu Chiu & William Tang, 2022. "Measuring the Operational Efficiency and the Water Resources Management Efficiency for Industrial Parks: Empirical Study of Industrial Parks in Taiwan," Sustainability, MDPI, vol. 14(21), pages 1-22, October.
    21. Efthymia Kyriakopoulou & Anastasios Xepapadeas, 2011. "Spatial location decisions under environmental policy and housing externalities," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 13(3), pages 195-217, September.

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