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Externalities in Urban Sustainability

Author

Listed:
  • Erik T. Verhoef
  • Peter Nijkamp

    (Vrije Universiteit Amsterdam)

Abstract

This paper studies urban sustainability from the perspective ofexternalities. We develop a general spatialequilibrium model of a monocentric city, in which two types ofexternalities occur. On the one hand, pollution inthe industrial centre leads to a spatially differentiateddeterioration of the environmental quality in the residentialarea. On the other hand, the existence of the city is explained byagglomeration economies, represented as simpleMarshallian external benefits in production. We investigate free-market versus first-best and second-best optimalspatial equilibria, and conclude that the pursuit of environmentalgoals may sometimes come at the expense ofreduced agglomeration economies, but may actually sometimes alsostimulate these economies.

Suggested Citation

  • Erik T. Verhoef & Peter Nijkamp, 2000. "Externalities in Urban Sustainability," Tinbergen Institute Discussion Papers 00-077/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20000077
    as

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    File URL: https://papers.tinbergen.nl/00077.pdf
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    References listed on IDEAS

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    Cited by:

    1. Moriki Hosoe & Tohru Naito, 2006. "Trans‐boundary pollution transmission and regional agglomeration effects," Papers in Regional Science, Wiley Blackwell, vol. 85(1), pages 99-120, March.

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    More about this item

    Keywords

    Urban equilibrium; environmental externalities; agglomeration externalities;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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