Fair share: Siting noxious facilities as a risk distribution game under nontransferable utility

Raul P. Lejano, Climis A. Davos

Research output: Contribution to journalArticlepeer-review


The search for equitable solutions to the siting of noxious facilities has long been an unresolved problem, theoretically and politically. Common prescriptions often involve compensating host communities. In this article, we address the case when compensation is not an option, or when we are unable to translate risk into a common measure of utility. We propose a new analytic for finding equity-based fair-share distributions of risk, which translates directly to mixed siting strategies. In order to do this, we employ a new general solution concept for n-person bargaining games under nontransferable utility. We discuss conditions under which the existence of such solutions can be proven. Last, we illustrate the solution concept with application to the LANCER project, a controversial municipal incinerator originally proposed for East Los Angeles, comparing results obtained with the (Ntu)Shapley value with the actual proposal. Finally, we point out that solutions will involve risk elimination, not just redistribution per se, but we need both, and to talk of one without the other is at times unjust, at times ineffectual, and often both.

Original languageEnglish (US)
Pages (from-to)251-266
Number of pages16
JournalJournal of Environmental Economics and Management
Issue number2
StatePublished - Mar 2002

ASJC Scopus subject areas

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law


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