Why Not in Your Backyard? On the Location and Size of a Public Facility

28 Pages Posted: 11 Mar 2008

See all articles by Giorgio Bellettini

Giorgio Bellettini

University of Bologna - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Hubert Kempf

Ecole Normale Superieure de Cachan (ENS); National Research University Higher School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 2008

Abstract

In this paper, we tackle the issue of locating a public facility which provides a public good in a closed and populated territory. This facility generates differentiated benefits to neighborhoods depending on their distance from it. In the case of a Nimby facility, the smaller is the distance, the lower is the individual benefit. The opposite is true in the case of an anti-Nimby facility. We first characterize the optimal location which would be chosen by a social planner. Then we introduce a common-agency lobbying game, where agents attempt to influence the location and provision decisions by the government. Some interesting results arise in the case where only a subset of neighborhoods lobby. First, the solution of the lobbying game can replicate the optimal solution. Second, under-provision and over-provision of the public good may be obtained both in the Nimby and the anti-Nimby cases. The provision outcome depends on the presence of either a congestion effect or an agglomeration effect. Third, some non-lobbying neighborhoods may be better off than in the case where all neighborhoods lobby, which raises the possibility of free-riding at the lobbying stage.

JEL Classification: R00

Suggested Citation

Bellettini, Giorgio and Kempf, Hubert, Why Not in Your Backyard? On the Location and Size of a Public Facility (March 2008). CESifo Working Paper Series No. 2248, Available at SSRN: https://ssrn.com/abstract=1104953

Giorgio Bellettini (Contact Author)

University of Bologna - Department of Economics ( email )

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CESifo (Center for Economic Studies and Ifo Institute) ( email )

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Munich, DE-81679
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Hubert Kempf

Ecole Normale Superieure de Cachan (ENS) ( email )

61 avenue du président Wilson
Cachan, Paris 94235
France

National Research University Higher School of Economics

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

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