“Dirty Deeds Done Dirt Cheap”

This chapter defines the term “industrial gentrification” as the creation of new manufacturing zones that feature ecologically friendly, high-tech, and small-scale businesses designed to attract upwardly mobile, eco-friendly gentrifiers. I begin with an historic look at how zoning regulations created areas of sacrifice and gain. Initially, these regulations insulated wealthy residential zones from noxious facilities while interspersing industrial land uses and affordable housing. In the early 1960s, New York City elites reshuffled these spatial arrangements in ways that favored the growth of the finance, insurance, and real estate sectors and pushed industrial businesses to the city’s perimeters. Gentrification (and displacement) were a key part of this new economic strategy. After the 2008 recession, the Bloomberg administration rebooted the manufacturing economy as part of its larger sustainability agenda. However, like other green amenities, the location of low-tech manufacturing spaces corresponded with upscale redevelopment. This further concentrated heavy manufacturing facilities in non-gentrifying neighborhoods. Moreover, rather than reviving a lost employment sector, new manufacturing offered high-priced items produced by a small number of nonunionized, low-wage workers.

Provision of noxious facilities using a market-like mechanism: A simple implementation in the lab

We study the provision of a public project that globally behaves as a public good but locally behaves as a private bad. This scenario imposes two problems: (i) finding a compensation that makes the project acceptable for the pre-determined host, and (ii) securing the budget to pay for the project and the required compensation. We use a market-like mechanism with two useful properties for this scenario: players can either contribute or request subsidies to fund the public project, and players have veto power over the desired project quantity. In our game, two players benefit from a waste incinerator facility, whereas the third group member, the host, is harmed if the facility is too large. We analyze the efficiency and the re-distributive potential of this mechanism, with and without communication, among group members. We find that the probability of positive provision did not differ with and without communication. However, average provided quantities with respect to the efficient quantity increased from 54% to 81% with communication. We also find that contributions fell below the Lindahl taxes, allowing the players who benefit from a larger facility to accrue most of the efficiency gains. The latter result is consistent with the infrequent evidence of veto threats as a bargaining strategy.

Choice of noxious facilities: Case of a solid waste incinerator versus a sanitary landfill in Malaysia

A choice experiment analysis was conducted to estimate the preference for specific waste disposal technologies in Malaysia. The study found that there were no significant differences between the choice of a sanitary landfill or an incinerator. What matters is whether any disposal technology would lead to obvious social benefits. A waste disposal plan which is well linked or integrated with the community will ensure its acceptance. Local authorities will be challenged to identify solid waste disposal sites that are technically appropriate and also socially desirable.