Development: Who Pays and Who Benefits? GCP-96-8

Joseph Persky ,  Wim Wiewel   
Joseph Persky Professor of Economics at the University of Illinois at Chicago.  Wim Wiewel Dean of the College of Urban Planning and Public Affairs.

All firm locations create costs and benefits. Conventional wisdom holds that any negative effects of firms locating in the outer suburbs are greatly overshadowed by very large private benefits. The weight of the evidence presented here suggests this is not the case. For society as a whole, deconcentration of development to outer suburban areas brings few or no net gains while presenting significant inequities in the distribution of costs and benefits. Firms locating in outer suburban areas reap most of the benefits, while most of the costs (or benefits foregone) are borne by unemployed city residents, commuters who bear the cost of congestion, accidents, pollution and taxpayers who foot the bill for subsidies for transportation, home-ownership, and other public subsidies.

Full Text PDF »