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The Effects of Pollution Taxes on Urban Areas with an Endogenous Plant Location

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  • Hong Hwang
  • Chao-Cheng Mai

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Abstract

This paper has integrated space into the effect of a direct pollution control on the pollution damage of heavily populated areas like CBD. This integration gives us some new insights into the effectiveness of a pollution tax as a pollution control device when the plant location of the firm is endogenized. It is shown that when the plant location is endogenous, as pollution taxes become higher, the firm moves its plant towards the CBD, causing higher pollution damage to the CBD residents, if the production function exhibits decreasing returns to scale. Copyright Kluwer Academic Publishers 2004

Suggested Citation

  • Hong Hwang & Chao-Cheng Mai, 2004. "The Effects of Pollution Taxes on Urban Areas with an Endogenous Plant Location," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 29(1), pages 57-65, September.
  • Handle: RePEc:kap:enreec:v:29:y:2004:i:1:p:57-65
    DOI: 10.1023/B:EARE.0000035440.20693.f6
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    References listed on IDEAS

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    Cited by:

    1. Biing-Shiunn Yang & Chao-Cheng Mai, 2013. "The impact of uncertain environmental regulatory policy on optimal plant location and anti-pollution technology selection," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(3), pages 753-769, June.
    2. Hsin-I Fan & Yeung-Nan Shieh, 2009. "Pollution Taxes and Location Decision under Free Entry Oligopoly," Economics Bulletin, AccessEcon, vol. 29(1), pages 244-252.

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    Keywords

    endogenous plant location; pollution taxes;

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