Please use this identifier to cite or link to this item: http://hdl.handle.net/1893/10080
Appears in Collections:Economics Journal Articles
Peer Review Status: Refereed
Title: Location choice by households and polluting firms: An evolutionary approach
Authors: Dijkstra, Bouwe R
de, Vries Frans
Contact Email: f.p.devries@stir.ac.uk
Keywords: environmental policy
location choice
evolutionary game theory
Issue Date: Feb-2006
Publisher: Elsevier
Citation: Dijkstra BR & de Vries F (2006) Location choice by households and polluting firms: An evolutionary approach, European Economic Review, 50 (2), pp. 425-446.
Abstract: This paper examines several policy regimes to deal with the problem of households suffering from environmental damage by firms in the same region. We employ an evolutionary framework to analyze migration movements in the course of time, since firms and households will not relocate immediately in response to payoff differentials. We show that taxation gives firms and households an incentive to stay away from each other. Laissez faire (compensation) only gives households (firms) an incentive to stay away from firms (households). We find that taxation creates the right incentives to reach a local welfare maximum. However, when there are multiple local maxima, circumstances may arise under which compensation leads to a better outcome than taxation.
Type: Journal Article
URI: http://hdl.handle.net/1893/10080
DOI Link: http://dx.doi.org/10.1016/j.euroecorev.2004.09.006
Rights: The publisher does not allow this work to be made publicly available in this Repository. Please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study.
Affiliation: University of Nottingham
Economics

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