Voluntary Siting of Noxious Facilities: The Role of Compensation

The siting of noxious facilities is an intrinsically difficult problem because the host region or community perceives that it absorbs most of the costs and risks while others accrue the benefits. There is normally little long-run employment created by facilities which store waste, and the tax revenues that may be forthcoming are generally not viewed as benefits if the residents perceive the facility as generating risks to themselves and future generations. Most people are not willing to trade off economic benefits for risk to themselves or others.