IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v308y2023i3p1344-1354.html
   My bibliography  Save this article

Siting noxious facilities: Efficiency and majority rule decisions

Author

Listed:
  • Hamilton, Timothy L.
  • Eynan, Amit

Abstract

This paper analyzes the inefficiency of majority-rule voting in making siting decisions for noxious facilities, such as waste treatment facilities, landfills, or nuclear waste repositories. In particular, we demonstrate in a general context that a majority-rule voting process leads localities to make decisions that impose aggregate costs that are larger than aggregate benefits. We develop a robust model to establish the prevalence of such inefficiencies and demonstrate the mechanisms that exacerbate or mitigate them. The model illustrates how the spatial distribution of the population and the severity of disamenity costs can generate outcomes that make the entire locality worse off. Based on these properties, we provide a feasible remedy. Analysis of U.S. census data illustrates the magnitude of potential inefficiencies that arise with simple majority-rule decisions. Such losses can be mitigated using our model, which easily captures the aggregate disamenity cost and can consequently recommend the required voting supermajority to ensure efficiency.

Suggested Citation

  • Hamilton, Timothy L. & Eynan, Amit, 2023. "Siting noxious facilities: Efficiency and majority rule decisions," European Journal of Operational Research, Elsevier, vol. 308(3), pages 1344-1354.
    • Handle: RePEc:eee:ejores:v:308:y:2023:i:3:p:1344-1354
    DOI: 10.1016/j.ejor.2022.12.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377221722009341
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejor.2022.12.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. David Pérez-Castrillo & David Wettstein, 2002. "Choosing Wisely: A Multibidding Approach," American Economic Review, American Economic Association, vol. 92(5), pages 1577-1587, December.
    2. Farber, Stephen, 1998. "Undesirable facilities and property values: a summary of empirical studies," Ecological Economics, Elsevier, vol. 24(1), pages 1-14, January.
    3. Esteban Rossi-Hansberg & Pierre-Daniel Sarte & Raymond Owens, 2010. "Housing Externalities," Journal of Political Economy, University of Chicago Press, vol. 118(3), pages 485-535, June.
    4. 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 295-299, May.
    5. Sullivan, Arthur M., 1990. "Victim compensation revisited : Efficiency versus equity in the siting of noxious facilities," Journal of Public Economics, Elsevier, vol. 41(2), pages 211-225, March.
    6. Aitken, Mhairi, 2010. "Wind power and community benefits: Challenges and opportunities," Energy Policy, Elsevier, vol. 38(10), pages 6066-6075, October.
    7. Erkut, Erhan & Neuman, Susan, 1989. "Analytical models for locating undesirable facilities," European Journal of Operational Research, Elsevier, vol. 40(3), pages 275-291, June.
    8. Norman Schofield, 1983. "Generic Instability of Majority Rule," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 50(4), pages 695-705.
    9. Grislain-Letrémy, Céline & Katossky, Arthur, 2014. "The impact of hazardous industrial facilities on housing prices: A comparison of parametric and semiparametric hedonic price models," Regional Science and Urban Economics, Elsevier, vol. 49(C), pages 93-107.
    10. Mitchell, Robert Cameron & Carson, Richard T, 1986. "Property Rights, Protest, and the Siting of Hazardous Waste Facilities," American Economic Review, American Economic Association, vol. 76(2), pages 285-290, May.
    11. Kunreuther, Howard & Kleindorfer, Paul & Knez, Peter J. & Yaksick, Rudy, 1987. "A compensation mechanism for siting noxious facilities: Theory and experimental design," Journal of Environmental Economics and Management, Elsevier, vol. 14(4), pages 371-383, December.
    12. Partha Dasgupta & Eric Maskin, 2008. "On The Robustness of Majority Rule," Journal of the European Economic Association, MIT Press, vol. 6(5), pages 949-973, September.
    13. David Mueller, 2017. "Grid extension in German backyards: a game-theory rationale," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 60(3), pages 437-461, March.
    14. 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.
    15. repec:dau:papers:123456789/14350 is not listed on IDEAS
    16. Donald G. Saari, 1997. "The generic existence of a core for q -rules (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 9(2), pages 219-260.
    17. McCluskey, Jill J. & Rausser, Gordon C., 2003. "Hazardous waste sites and housing appreciation rates," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 166-176, March.
    18. Eiselt, H.A. & Marianov, Vladimir, 2014. "A bi-objective model for the location of landfills for municipal solid waste," European Journal of Operational Research, Elsevier, vol. 235(1), pages 187-194.
    19. McKelvey, Richard D, 1979. "General Conditions for Global Intransitivities in Formal Voting Models," Econometrica, Econometric Society, vol. 47(5), pages 1085-1112, September.
    20. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-719, November.
    21. Oates, Wallace E. & Schwab, Robert M., 1988. "Economic competition among jurisdictions: efficiency enhancing or distortion inducing?," Journal of Public Economics, Elsevier, vol. 35(3), pages 333-354, April.
    22. Laurent-Lucchetti, Jérémy & Leroux, Justin, 2009. "Axiomatic foundation for Lindahl pricing in the NIMBY context," MPRA Paper 14930, University Library of Munich, Germany.
    23. Coutinho-Rodrigues, João & Tralhão, Lino & Alçada-Almeida, Luís, 2012. "A bi-objective modeling approach applied to an urban semi-desirable facility location problem," European Journal of Operational Research, Elsevier, vol. 223(1), pages 203-213.
    24. John Loomis, 2011. "What'S To Know About Hypothetical Bias In Stated Preference Valuation Studies?," Journal of Economic Surveys, Wiley Blackwell, vol. 25(2), pages 363-370, April.
    25. Fernandez, J. & Fernandez, P. & Pelegrin, B., 2000. "A continuous location model for siting a non-noxious undesirable facility within a geographical region," European Journal of Operational Research, Elsevier, vol. 121(2), pages 259-274, March.
    26. Demesouka, Olympia E. & Anagnostopoulos, Konstantinos P. & Siskos, Eleftherios, 2019. "Spatial multicriteria decision support for robust land-use suitability: The case of landfill site selection in Northeastern Greece," European Journal of Operational Research, Elsevier, vol. 272(2), pages 574-586.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rudy Santore, 2014. "Noxious Facilities, Environmental Damages, and Efficient Randomized Siting," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(1), pages 101-116, January.
    2. Ferraz, Eduardo & Mantilla, César, 2020. "Lindahl vs. Lindahl: Optimal siting and sizing of a noxious facility," Working papers 65, Red Investigadores de Economía.
    3. Laurent-Lucchetti, Jérémy & Leroux, Justin, 2011. "Choosing and sharing," Games and Economic Behavior, Elsevier, vol. 73(1), pages 296-300, September.
    4. Ghidoni, Riccardo, 2017. "Mistrust and Opposition to Large-Scale Projects : An Experiment on the Role of Uncertainty," Discussion Paper 2017-053, Tilburg University, Center for Economic Research.
    5. Eli Feinerman & Israel Finkelshtain & Iddo Kan, 2004. "On A Political Solution to the NIMBY Conflict," American Economic Review, American Economic Association, vol. 94(1), pages 369-381, March.
    6. Laurent-Lucchetti, Jérémy & Leroux, Justin, 2009. "Axiomatic foundation for Lindahl pricing in the NIMBY context," MPRA Paper 14930, University Library of Munich, Germany.
    7. Yuichi Ishimura & Kenji Takeuchi, 2017. "Does conflict matter? Spatial distribution of disposal sites in Japan," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(1), pages 99-120, January.
    8. Alberti, Federica & Mantilla, César, 2020. "Provision of noxious facilities using a market-like mechanism: A simple implementation in the lab," Working papers 35, Red Investigadores de Economía.
    9. Banks, Jeffrey S. & Duggan, John & Le Breton, Michel, 2002. "Bounds for Mixed Strategy Equilibria and the Spatial Model of Elections," Journal of Economic Theory, Elsevier, vol. 103(1), pages 88-105, March.
    10. Martin Besfamille & Jean-Marie Lozachmeur, 2010. "NIMBY and mechanism design under different constitutional constraints," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 17(2), pages 114-132, April.
    11. Pérez-Castrillo, David & Quérou, Nicolas, 2012. "Smooth multibidding mechanisms," Games and Economic Behavior, Elsevier, vol. 76(2), pages 420-438.
    12. Modica, Marco, 2017. "Does the construction of biogas plants affect local property values?," Economics Letters, Elsevier, vol. 159(C), pages 169-172.
    13. Roberta Occhilupo & Giuliana Palumbo & Paolo Sestito, 2011. "Siting public facilities: a theoretical and empirical analysis of the Nimby syndrome in Italy," Questioni di Economia e Finanza (Occasional Papers) 91, Bank of Italy, Economic Research and International Relations Area.
    14. Garrone, Paola & Groppi, Angelamaria, 2012. "Siting locally-unwanted facilities: What can be learnt from the location of Italian power plants," Energy Policy, Elsevier, vol. 45(C), pages 176-186.
    15. Yuichi Ishimura & Kenji Takeuchi, 2015. "Spatial Distribution of Disposal Sites¦ Empirical Evidence from Japan," Discussion Papers 1523, Graduate School of Economics, Kobe University.
    16. Caplan, Arthur & Grijalva, Therese & Jackson-Smith, Douglas, 2007. "Using choice question formats to determine compensable values: The case of a landfill-siting process," Ecological Economics, Elsevier, vol. 60(4), pages 834-846, February.
    17. Laura Abrardi & Luca Colombo & Pier Angelo Mori, 2016. "Customer Ownership And Quality Provision In Public Services Under Asymmetric Information," Economic Inquiry, Western Economic Association International, vol. 54(3), pages 1499-1518, July.
    18. Federica Alberti & César Mantilla, 2024. "A mechanism requesting prices and quantities may increase the provision of heterogeneous public goods," Experimental Economics, Springer;Economic Science Association, vol. 27(1), pages 244-270, March.
    19. Toshiaki Sasao, 2004. "Analysis of the socioeconomic impact of landfill siting considering regional factors," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 6(2), pages 147-175, June.
    20. Toshiaki Sasao, 2004. "Analysis of the socioeconomic impact of landfill siting considering regional factors," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 6(2), pages 147-175, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:308:y:2023:i:3:p:1344-1354. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.