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- Title
THE PRICE OF SILENCE: MARKETS FOR NOISE LICENSES AND AIRPORTS.
- Authors
Bréchet, Thierry; Picard, Pierre M.
- Abstract
This article presents a market design for the management of noise pollution created by aircraft traffic around airports. A local market for noise licenses allows noise generators to compensate noise victims and to meet social acceptability. We show that the market allows the market designer to implement the social planner's optimal allocation of flights as long as the latter does not put too high a weight in his/her objective function on firms' profits compared to the disutility of noise pollution. The fact that local representatives of noise victims may be strategic players does not fundamentally alter this finding. Because of the market auctioneer's information constraints, noise licenses are likely to distribute windfall gains to residents, which alters the urban structure in the long run.
- Subjects
AIRPLANE noise laws; NOISE pollution laws; NOISE control laws; BUSINESS licenses; EXTERNALITIES; AIRCRAFT industry; URBAN planning
- Publication
International Economic Review, 2010, Vol 51, Issue 4, p1097
- ISSN
0020-6598
- Publication type
Article
- DOI
10.1111/j.1468-2354.2010.00612.x