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Why not in your Backyard? On the Location and Size of a Public Facility

  • Giorgio Bellettini
  • Hubert Kempf

In this paper, we tackle the issue of locating a public facility which provides a public good in a closed and populated territory. This facility generates differentiated benefits to neighborhoods depending on their distance from it. In the case of a Nimby facility, the smaller is the distance, the lower is the individual benefit. The opposite is true in the case of an anti-Nimby facility. We first characterize the optimal location which would be chosen by a social planner. Then we introduce a common-agency lobbying game, where agents attempt to influence the location and provision decisions by the government. Some interesting results arise in the case where only a subset of neighborhoods lobby. First, the solution of the lobbying game can replicate the optimal solution. Second, under-provision and over-provision of the public good may be obtained both in the Nimby and the anti-Nimby cases. The provision outcome depends on the presence of either a congestion effect or an agglomeration effect. Third, some non-lobbying neighborhoods may be better off than in the case where all neighborhoods lobby, which raises the possibility of free-riding at the lobbying stage.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2248.

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Date of creation: 2008
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Handle: RePEc:ces:ceswps:_2248
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  1. Felli, L. & Merlo, A., 2000. "Endogenous Lobbying," Working Papers 00-04, C.V. Starr Center for Applied Economics, New York University.
  2. Bernheim, B Douglas & Whinston, Michael D, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, MIT Press, vol. 101(1), pages 1-31, February.
  3. Ottaviano, Gianmarco I. P. & Thisse, Jacques-Francois, 2002. "Integration, agglomeration and the political economics of factor mobility," Journal of Public Economics, Elsevier, vol. 83(3), pages 429-456, March.
  4. Gabriel Ahlfeldt & Wolfgang Maennig, 2010. "Impact of sports arenas on land values: evidence from Berlin," The Annals of Regional Science, Springer, vol. 44(2), pages 205-227, April.
  5. Kunreuther, Howard & Kleindorfer, Paul R, 1986. "A Sealed-Bid Auction Mechanism for Siting Noxious Facilities," American Economic Review, American Economic Association, vol. 76(2), pages 295-99, May.
  6. Munoz-Perez, Jose & Saameno-Rodriguez, Juan Jose, 1999. "Location of an undesirable facility in a polygonal region with forbidden zones," European Journal of Operational Research, Elsevier, vol. 114(2), pages 372-379, April.
  7. repec:ags:afjare:141665 is not listed on IDEAS
  8. Thisse, Jacques-Francois & Wildasin, David E., 1992. "Public facility location and urban spatial structure : Equilibrium and welfare analysis," Journal of Public Economics, Elsevier, vol. 48(1), pages 83-118, June.
  9. Ingberman Daniel E., 1995. "Siting Noxious Facilities: Are Markets Efficient?," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages S20-S33, November.
  10. Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 21-92, Tel Aviv.
  11. Feinerman, Eli & Finkelshtain, Israel & Kan, Iddo, 2003. "On A Political Solution To The Nimby Conflict," Discussion Papers 15000, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
  12. Martin Besfamille & Jean-Marie Lozachmeur, 2010. "NIMBY and mechanism design under different constitutional constraints," International Tax and Public Finance, Springer, vol. 17(2), pages 114-132, April.
  13. Minehart, Deborah & Neeman, Zvika, 2002. "Effective Siting of Waste Treatment Facilities," Journal of Environmental Economics and Management, Elsevier, vol. 43(2), pages 303-324, March.
  14. Per Fredriksson, 2000. "The Siting of Hazardous Waste Facilities in Federal Systems: The Political Economy of NIMBY," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 15(1), pages 75-87, January.
  15. Besley, Timothy & Coate, Stephen, 2001. "Lobbying and Welfare in a Representative Democracy," Review of Economic Studies, Wiley Blackwell, vol. 68(1), pages 67-82, January.
  16. Wellisch Dietmar, 1995. "Locational Choices of Firms and Decentralized Environmental Policy with Various Instruments," Journal of Urban Economics, Elsevier, vol. 37(3), pages 290-310, May.
  17. 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.
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