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Geographical Economics and the Role of Pollution on Location

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  • Charles van Marrewijk

    (Faculty of Economics, Erasmus Universiteit Rotterdam)

Abstract

Geographical economics analyzes the endogenous determination of the location of economic activity in a general equilibrium framework. We investigate the impact of pollution by focusing on the interaction between location advantages and negative pollution externalities associated with local production. We distinguish between two goods (food and manufactures) and two factors of production (mobile human capital and immobile unskilled labor) and show that agglomeration of economic activity tends to become less attractive with pollution, and thus less likely. Moreover, we provide a simple necessary and sufficient condition for the spreading of economic activity to become more attractive, and thus more likely.

Suggested Citation

  • Charles van Marrewijk, 2005. "Geographical Economics and the Role of Pollution on Location," Tinbergen Institute Discussion Papers 05-018/2, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20050018
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    References listed on IDEAS

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    Cited by:

    1. Bouwe R. Dijkstra, 2022. "Payments from Households to Distant Polluting Firms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(3), pages 681-715, July.
    2. Jiayuan Zhou & Yunxia Li & Bo Li, 2022. "Restructure or Misallocation? Enterprises’ Carbon Emission Intensity under Market Integration," Sustainability, MDPI, vol. 14(24), pages 1-18, December.
    3. Eppink, Florian V. & Withagen, Cees A., 2009. "Spatial patterns of biodiversity conservation in a multiregional general equilibrium model," Resource and Energy Economics, Elsevier, vol. 31(2), pages 75-88, May.
    4. Martin F. Quaas & Sjak Smulders, 2018. "Brown Growth, Green Growth, and the Efficiency of Urbanization," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 529-549, October.
    5. Sonia Ben Kheder & Natalia Zugravu, 2008. "The pollution haven hypothesis: a geographic economy model in a comparative study," Post-Print halshs-00344845, HAL.
    6. Dean M. Hanink, 2010. "Perspectives on Regional Change: A Review Essay on Handbook of Regional Growth and Development Theories," Growth and Change, Wiley Blackwell, vol. 41(1), pages 3-27, March.
    7. Birgit Bednar-Friedl & Olivia Koland & Karl Steininger, 2011. "Urban sprawl and policy responses: a general equilibrium analysis of residential choice," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 54(1), pages 145-168.
    8. Efthymia Kyriakopoulou & Anastasios Xepapadeas, 2010. "Environmental Policy and the Collapse of the Monocentric City," DEOS Working Papers 1021, Athens University of Economics and Business.
    9. Ben Kheder, Sonia & Zugravu, Natalia, 2012. "Environmental regulation and French firms location abroad: An economic geography model in an international comparative study," Ecological Economics, Elsevier, vol. 77(C), pages 48-61.
    10. 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.
    11. 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.
    12. Wu, JunJie & Segerson, Kathleen & Wang, Chunhua, 2023. "Is environmental regulation the answer to pollution problems in urbanizing economies?," Journal of Environmental Economics and Management, Elsevier, vol. 117(C).
    13. Grazi, Fabio & van den Bergh, Jeroen C.J.M. & Rietveld, Piet, 2006. "Modeling Spatial Sustainability: Spatial Welfare Economics versus Ecological Footprint," Sustainability Indicators and Environmental Valuation Working Papers 12212, Fondazione Eni Enrico Mattei (FEEM).
    14. Efthymia Kyriakopoulou & Anastasios Xepapadeas, 2011. "Spatial location decisions under environmental policy and housing externalities," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 13(3), pages 195-217, September.
    15. Anastasios Xepapadeas & Efthymia Kyriakopoulou, 2009. "Environmental Policy, Spatial Spillovers and the Emergence of Economic Agglomerations," Working Papers 2009.70, Fondazione Eni Enrico Mattei.
    16. Caballero, María Victoria & Martínez-García, María Pilar & Morales, José R., 2024. "Pollution-induced migration and environmental policy in an economic geography model," Resource and Energy Economics, Elsevier, vol. 76(C).
    17. Yingming Zhu & Yuan Li & Yi Wang & Lingfeng Li, 2021. "The Impact of Water and Soil Scarcity and Pollution on Industrial Agglomeration: Evidence from China," Sustainability, MDPI, vol. 13(10), pages 1-18, May.
    18. Kyriakopoulou, Efthymia & Xepapadeas, Anastasios, 2013. "Environmental policy, first nature advantage and the emergence of economic clusters," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 101-116.

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    More about this item

    Keywords

    Geographical Economics; Pollution; Location;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

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