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Correcting agglomeration economies: How air pollution matters

Abstract : The aim of the paper is to correct standard measures of agglomeration economies in order to account for air pollution generated by commuting. This paper examines the impact of nitrogen oxide (NOX) on worker productivity. NOX emissions are primarily released by the transportation sector. Literature on agglomeration economies is abundant and highlights the positive role of density on productivity. Nevertheless, this literature does not take into account the environmental impact generated by a better accessibility, namely commuting. We rst develop a general framework to estimate the agglomeration economies for the 304 French employment areas. In line with the literature, we nd an estimate of 0.05 for the elasticity coe cient of productivity with respect to density. Then, we introduce NOX emissions. The estimates suggest that emissions reduce the positive e ect of density on productivity by more 13%. The model con rms that air pollution matters. Agglomeration economies should be corrected by the environmental impacts associated with the enhancement of accessibility such as the implementation of a new transport infrastructure or policy.
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https://hal.univ-lille3.fr/hal-01007019
Contributor : Marion Romo <>
Submitted on : Monday, June 16, 2014 - 4:43:57 PM
Last modification on : Thursday, February 6, 2020 - 3:34:02 PM
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  • HAL Id : hal-01007019, version 1

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Marion Drut, Aurélie Mahieux. Correcting agglomeration economies: How air pollution matters. 2014. ⟨hal-01007019⟩

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