Why Me ? Siting a Locally Unwanted Public Good

Jérémy Laurent-Lucchetti and Justin Leroux

No 07-14, Cahiers de recherche from HEC Montréal, Institut d'économie appliquée

Abstract: The siting of public facilities, such as prisons, airports or incinerators for hazardous wastes faces social rejection by local population. These public goods have a private bad aspect which creates a siting problem: all communities benefit from its existence, but only one (the host) bears its cost. We tackle this inevitable asymmetry from a responsibility and equity viewpoint: the host should not be perceived as a "victim". To realize this objective, we design a method to share the total cost (the disutility of the host plus the construction cost) in a way that bypasses the natural asymmetry of the problem. We also introduce a basic incentives property which has strangely been overlooked in the existing literature: voluntary participation.

Pages: 21 pages
Date: 2007-12
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