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The Old Lady Visits Your Backyard: A Tale of Morals and Markets

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  • Frey, Bruno S
  • Oberholzer-Gee, Felix
  • Eichenberger, Reiner

Abstract

Local opposition to many projects makes it increasingly difficult to find sites for socially desirable facilities. As has been widely documented, compensation for local disamenities does not increase the level of support. An empirical analysis of the Swiss search for a nuclear waste repository even reveals decreased acceptance due to the rejection of bribes and the crowding-out of public spirit. However, a 'compensation cycle' may be exploited to finally win the support of host communities. As siting issues are decided in the realm of politics, an economic theory of compensation must focus on the interplay between morals and markets. Copyright 1996 by University of Chicago Press.

Suggested Citation

  • Frey, Bruno S & Oberholzer-Gee, Felix & Eichenberger, Reiner, 1996. "The Old Lady Visits Your Backyard: A Tale of Morals and Markets," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1297-1313, December.
    • Handle: RePEc:ucp:jpolec:v:104:y:1996:i:6:p:1297-1313
    DOI: 10.1086/262060
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    References listed on IDEAS

    as
    1. Gary S. Becker, 1992. "Habits, Addictions, and Traditions," Kyklos, Wiley Blackwell, vol. 45(3), pages 327-345, August.
    2. Felix Oberholzer-Gee & Bruno S. Frey & Albert Hart & Werner W. Pommerehne, 1995. "Panik, Protest und Paralyse Eine empirische Untersuchung über nukleare Endlager in der Schweiz," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 131(II), pages 147-177, June.
    3. Buchanan, James M & Lee, Dwight R, 1982. "Politics, Time, and the Laffer Curve," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 816-819, August.
    4. Franciosi, Robert, et al, 1995. "Fairness: Effect on Temporary and Equilibrium Prices in Posted-Offer Markets," Economic Journal, Royal Economic Society, vol. 105(431), pages 938-950, July.
    5. Bruno S. Frey & Felix Oberholzer-Gee, 1996. "Fair siting procedures: An empirical analysis of their importance and characteristics," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 15(3), pages 353-376.
    6. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
    7. Kunreuther, Howard & Easterling, Douglas, 1990. "Are Risk-Benefit Tradeoffs Possible in Siting Hazardous Facilities?," American Economic Review, American Economic Association, vol. 80(2), pages 252-256, May.
    8. repec:bla:kyklos:v:45:y:1992:i:3:p:327-45 is not listed on IDEAS
    9. Bruno S. Frey, 1994. "How Intrinsic Motivation is Crowded out and in," Rationality and Society, , vol. 6(3), pages 334-352, July.
    10. Howard Kunreuther & Kevin Fitzgerald & Thomas D. Aarts, 1993. "Siting Noxious Facilities: A Test of the Facility Siting Credo," Risk Analysis, John Wiley & Sons, vol. 13(3), pages 301-318, June.
    11. anonymous, 1991. "Monetary policy and open market operations during 1990," Quarterly Review, Federal Reserve Bank of New York, vol. 16(Spr), pages 52-78.
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