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Jeremy Laurent-lucchetti and Justin Leroux
''Lindahl prices solve the NIMBY problem''
( 2010, Vol. 30 No.3 )
The siting of public facilities such as prisons or waste disposal facilities typically faces rejection by local populations (the "NIMBY" syndrome, for Not In My BackYard). These public goods exhibit a private bad aspect creating an asymmetry: all involved communities benefit from their existence, but only the host bears the local negative externality. We show that the well-known Lindahl pricing scheme constitutes the only cost-sharing method satisfying a set of properties specifically designed to handle the siting problem.
Keywords: Public Goods; Externalities; NIMBY; Location; Cost sharing.
JEL: H4 - Publicly Provided Goods: General
Manuscript Received : Jul 29 2010 Manuscript Accepted : Sep 21 2010

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