Spatial Arrangements of Externality Generating and Receiving Activities
Alexander E. Saak
November 2003 [03-WP 348]
Saak, A.E. 2003. "Spatial Arrangements of Externality Generating and Receiving Activities." Working paper 03-WP 348. Center for Agricultural and Rural Development, Iowa State University.
Many cases of externalities in agricultural production such as pesticide drift, cross-pollination, and offensive odors are attributable to the incompatibility of neighboring land uses. This paper offers an examination of when an efficient activity arrangement is compatible with free-market incentives. Also, free-market and socially efficient activity arrangements are characterized in terms of spatial concentration of the externality generating uses.
Keywords: externality, graph partitioning, land-use arrangement, spatial concentration.