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Correcting agglomeration economies: How air pollution matters

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  • Marion Drut

    (EQUIPPE - Economie Quantitative, Intégration, Politiques Publiques et Econométrie - Université de Lille, Sciences et Technologies - Université de Lille, Sciences Humaines et Sociales - PRES Université Lille Nord de France - Université de Lille, Droit et Santé)

  • Aurélie Mahieux

    (IFSTTAR/AME/DEST - Dynamiques Economiques et Sociales des Transports - IFSTTAR - Institut Français des Sciences et Technologies des Transports, de l'Aménagement et des Réseaux - Communauté Université Paris-Est)

Abstract

The aim of the paper is to correct standard measures of agglomeration economies in order to account for air pollution generated by commuting. This paper examines the impact of nitrogen oxide (NOX) on worker productivity. NOX emissions are primarily released by the transportation sector. Literature on agglomeration economies is abundant and highlights the positive role of density on productivity. Nevertheless, this literature does not take into account the environmental impact generated by a better accessibility, namely commuting. We rst develop a general framework to estimate the agglomeration economies for the 304 French employment areas. In line with the literature, we nd an estimate of 0.05 for the elasticity coe cient of productivity with respect to density. Then, we introduce NOX emissions. The estimates suggest that emissions reduce the positive e ect of density on productivity by more 13%. The model con rms that air pollution matters. Agglomeration economies should be corrected by the environmental impacts associated with the enhancement of accessibility such as the implementation of a new transport infrastructure or policy.

Suggested Citation

  • Marion Drut & Aurélie Mahieux, 2014. "Correcting agglomeration economies: How air pollution matters," Working Papers hal-01007019, HAL.
    • Handle: RePEc:hal:wpaper:hal-01007019
    Note: View the original document on HAL open archive server: https://hal.univ-lille.fr/hal-01007019
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    References listed on IDEAS

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    Keywords

    agglomeration economies; accessibility; atmospheric pollution; transport policies;
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