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Noxious Facilities, Environmental Damages, and Efficient Randomized Siting

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  • Rudy Santore

Abstract

This paper considers the efficient siting of a noxious facility that causes environmental damages (for example, increased pollution) in the host community. The analysis shows that there can be multiple efficient locations without transfers, and that an efficient location need not have the smallest WTA or WTP. In general, there exist randomized outcomes that are ex ante efficient and that Pareto dominate efficient outcomes. The analysis also shows that a community’s most preferred lottery never provides full insurance. Under some conditions, lotteries with no host compensation are Pareto superior to those with compensation. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • 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.
    • Handle: RePEc:kap:enreec:v:57:y:2014:i:1:p:101-116
    DOI: 10.1007/s10640-013-9668-5
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    More about this item

    Keywords

    Siting mechanisms; Noxious facilities; Lotteries ; LULU; NIMBY; Q53; R52; R53;
    All these keywords.

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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