Arnott, Richard; Hochman, Oded; Rausser, Gordon C. - In: Journal of Urban Economics 64 (2008) 2, pp. 390-407
Space matters not only by inducing transport costs but also by mitigating pollution damages. Previous models of pollution either disregard space altogether or presume a predetermined separation between polluters and pollutees. In our model, workers commute to factories and all possible location...