governments establish the optimal city size when production processes involve environmental pollution. Our analysis delivers two … key insights. First, if an optimal scheme to regulate environmental pollution is implemented, cities chosen by local … governments are never too large. They are too small if pollution is purely global, but at the optimal size, if pollution is purely …

, environmental regulation, productivity, and consumer preferences have contributed to these reductions in pollution emissions. We … estimate the model's key parameters using administrative data on plant-level production and pollution decisions. We then … pollution changes. Finally, we compare the model-driven decomposition to a statistical decomposition. The model and data suggest …