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A Spatial Equilibrium Analysis of Air Pollution in China

Author

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  • Eiji Yamada
Abstract
Weconstructaspatialequilibriummodelwithendogenousairpollutionasaby-productof production andconsumption,wherespatiallymobileskilledandunskilledworkersareaffected negativelybutheterogeneouslybyairpollution.Usingacalibratedversionofthemodelbased on dataforChinain2010,weshowthatstrictregulationcanbea centripetal forcethatattracts workersandproductiontowardtheregulatedplace,whilereducingthelocalandoverallemission of pollutants.Thisresultisincontrasttotheinsightsoftraditionaltheoriesthatseeenviron- mental regulationasa centrifugal forceforthelocaleconomy.Themigrationofworkerswho care environmentalquality,input-outputlinkagesindomestictradenetworks,andopennessto internationaltrade,workinthemechanismdeliveringthisresult.Wethenconsiderahypothetical policy toreducenationalindustrialemissionby10percentandcomparestrategiesonhowto allocate reductionresponsibilitiesacrosscities.Wefindthatconcentratingresponsibilityina limited numberofrichcitiesmayoutperformamoreequalallocationintermsofwelfareand economic output.

Suggested Citation

  • Eiji Yamada, 2020. "A Spatial Equilibrium Analysis of Air Pollution in China," Working Papers 211, JICA Research Institute.
    • Handle: RePEc:jic:wpaper:211
    DOI: 10.18884/00001030
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    Keywords

    China; AirPollution; Domesticmigration; Spatialequilibriummodel; Environmental;
    All these keywords.

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