POPULATION GROWTH AND THE BENEFITS FROM OPTIMALLY PRICED EXTERNALITIES* Academic Article uri icon

abstract

  • "In this article we show that, considering only economic effects, even if population growth, by natural increase or immigration, increases congestion, pollution, and other forms of external costs, that provided pre-existing citizens own the resources giving rise to the externalities, and provided they efficiently price usage of such, that existing citizens must, in net average terms, be better off with population growth than without it. In simple terms the increased revenues they gain from efficient pricing at increased demand levels will be strictly greater than the monetary value of the increased external costs together with the higher tax costs they incur as consumers of the resources."

publication date

  • June 1995