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Concentration, separation, and dispersion: Economic geography and the environment


  • Rauscher, Michael


The paper investigates the spatial patterns of industrial location and environmental pollution in a new-economic-geography model. Factors of production and their owners are mobile, but factor owners are not required to live in the region in which their factors are employed. Under laisser-faire, a chase-and-flee cycle of location is possible: people, who prefer a clean environment, are chased by polluting industries, which want to locate geographically close to the market. Locational patterns under optimal environmental regulation include concentration, separation, dispersion and several intermediate patterns. Moreover, it is shown that marginal changes in environmental policy may induce discrete changes in locational patterns.

Suggested Citation

  • 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.
  • Handle: RePEc:zbw:roswps:109

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    References listed on IDEAS

    1. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    2. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    3. J.Peter Neary, 2001. "Of Hype and Hyperbolas: Introducing the New Economic Geography," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 536-561, June.
    4. Fabio Grazi & Jeroen C.J.M. van den Bergh & Piet Rietveld, 2006. "Modeling Spatial Sustainability: Spatial Welfare Economics versus Ecological Footprint," Working Papers 2006.5, Fondazione Eni Enrico Mattei.
    5. Michael Rauscher, 1995. "Environmental regulation and the location of polluting industries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 229-244, August.
    6. Brakman,Steven & Garretsen,Harry & van Marrewijk,Charles, 2009. "The New Introduction to Geographical Economics," Cambridge Books, Cambridge University Press, number 9780521698030, March.
    7. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
    8. Hoel, Michael, 1997. " Environmental Policy with Endogenous Plant Locations," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 241-259, June.
    9. 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.
    10. Baldwin, Richard E., 2001. "Core-periphery model with forward-looking expectations," Regional Science and Urban Economics, Elsevier, vol. 31(1), pages 21-49, February.
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    Cited by:

    1. 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.

    More about this item


    economic geography; migration; trade; pollution; environmental regulation;

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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