Siting locally-unwanted facilities: What can be learnt from the location of Italian power plants

► We model location choices for polluting power plants by Italian producers in 1999-2006. ► The efficiency of market-based siting policies is tested (i.e., plants located where environmental damage is lower). ► More than environmental costs, voice factors prevailed on the location choices. ► We conclude that market-based siting policies does not ensure an efficient outcome. ► Developers and communities relationship may suffer from relevant transaction costs