Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101987
Authors: 
Kyriakopoulou, Efthymia
Xepapadeas, Anastasios
Year of Publication: 
2014
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 8.2014
Abstract: 
We study the optimal and equilibrium distribution of industrial and residential land in a given region. The trade-off between the agglomeration and dispersion forces, in the form of pollution from stationary forces, environmental policy, production externalities, and commuting costs, determines the emergence of industrial and residential clusters across space. In this context, we define two kinds of spatial policies that can be used in order to close the gap between optimal and market allocations. More specifically, we show that the joint implementation of a site-specific environmental tax and a site-specific labor subsidy can reproduce the optimum as an equilibrium outcome. We also propose a novel approach that allows for endogenous determination of land use patterns and provides more precise results compared to previous studies.
Subjects: 
Spatial Policies
Agglomeration
Land Use
Pollution
Environmental Tax
Labor Subsidy
JEL: 
R14
R38
H23
Document Type: 
Working Paper

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