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Lindahl prices solve the NIMBY problem

Jérémy Laurent-Lucchetti and Justin Leroux

Economics Bulletin, 2010, vol. 30, issue 3, 2457-2463

Abstract: The siting of public facilities such as prisons or waste disposal facilities typically faces rejection by local populations (the "NIMBY" syndrome, for Not In My BackYard). These public goods exhibit a private bad aspect creating an asymmetry: all involved communities benefit from their existence, but only the host bears the local negative externality. We show that the well-known Lindahl pricing scheme constitutes the only cost-sharing method satisfying a set of properties specifically designed to handle the siting problem.

Keywords: Public Goods; Externalities; NIMBY; Location; Cost sharing. (search for similar items in EconPapers)
JEL-codes: H4 R0 (search for similar items in EconPapers)
Date: 2010-09-21
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