Correcting agglomeration economies: How air pollution matters

Marion Drut () and Aurélie Mahieux ()
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Marion Drut: CESAER - Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux - INRA - Institut National de la Recherche Agronomique - AgroSup Dijon - Institut National Supérieur des Sciences Agronomiques, de l'Alimentation et de l'Environnement
Aurélie Mahieux: EQUIPPE - Economie Quantitative, Intégration, Politiques Publiques et Econométrie - Université de Lille, Sciences et Technologies - Université de Lille, Sciences Humaines et Sociales - PRES Université Lille Nord de France - Université de Lille, Droit et Santé

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Abstract: This paper aims to correct standard measures of agglomeration economies to account for air pollution. This paper examines the impact of nitrogen oxide (NOX) a pollutant mainly released by transportation on worker productivity. Literature on agglomeration economies highlights the positive role of employment density on productivity, without accounting for the negative impacts of local pollutants. First, standard estimates of agglomeration economies for the 304 French employment areas are in line with the literature. Then, we introduce the variable(NOX) emissions and, once pollution is accounted for, the estimated direct impact of agglomeration externalities on productivity are lower by more than 13 per cent.

Keywords: Agglomeration economies; accessibility; atmospheric pollution; transportation policies (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

Published in Papers in Regional Science, 2017, 96 (2), pp.381-400. ⟨10.1111/pirs.12190⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01589704

DOI: 10.1111/pirs.12190

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