Shadow Market Area for Air Pollutants

David Meintrup and Chang Woon Nam
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David Meintrup: University of the Federal Armed Forces Munich, Werner-Heisenberg-Weg 39, 85577 Neubiberg, Germany

Environment and Planning B, 2009, vol. 36, issue 4, 664-681

Abstract: This study identifies the shadow market area of air pollutants on the basis of the Gaussian plume model. Since pollutants are dispersed by wind, transport costs are irrelevant in its formation. Pollutant distribution on the ground level has an asymmetric bell shape in the wind direction. In addition to the linear functions, the exponential and quadratic shadow price functions are considered for the compensation of a health hazard to consumers, where the strict liability in the framework of the Coase theorem applies. The shadow market area for pollutants is shell shaped. This specific characteristic has an implication for market boundaries between polluters and their location decisions.

Date: 2009
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Working Paper: Shadow Market Area for Air Pollutants (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envirb:v:36:y:2009:i:4:p:664-681

DOI: 10.1068/b34053

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