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I am solving the TOEIC workbook, by the way, I faced conflict that doesn't match meaning I knew.

The problem is

The newest branch of the library is located in/on Pine Street.

I think either 'in' or 'on' have the same meaning. But the commentary said that 'be located in' is mainly writing in front of building name and city name.

I don't know what is correct?

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Prepositions are so versatile in their usage that it's difficult to give exact rules on their usage. However, here is rough guideline from English Club: Prepositions of Place: at, in, on

In general, we use:

  • at for a POINT
  • in for an ENCLOSED SPACE
  • on for a SURFACE
at Point                in ENCLOSED SPACE   on SURFACE   
at the corner           in the garden       on the wall
at the bus stop         in London           on the ceiling
at the door             in France           on the door
at the top of the page  in a box            on the cover
at the end of the road  in my pocket        on the floor
at the entrance         in my wallet        on the carpet
at the crossroads       in a building       on the menu
at the front desk       in a car            on a page

Using the OP, we have

The newest branch of the library is located on Pine Street.

You use on when you want to talk about a building and its relation to a street. Roughly, you can consider the street as a "surface" so that it follows the guideline above.

The street is not really a point, so we don't use at. However, a specific address, like 123 Pine Street, is considered a point. In such a case, you could use at:

The newest branch of the library is located at 123 Pine Street.

The street is not really an enclosed space, so we don't use in. However, a specific city, like Los Angeles, is consider an enclosed space. In such a case, you could use in:

The newest branch of the library is located in Los Angeles.

I think the commentary you mentioned is referring to this specific example above. Referring to "writing in front of building", it's possible to use in. For example, there could be a sign in front of the building that reads

Our collection of contemporary works is located in this building.

Here, you can use in because the building is considered an enclosed space.

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    @Max just to check with regards to my answer are you a native BrE or AmE speaker? – DRF Apr 3 '17 at 13:16
  • @DRF: Clicking on Max's profile reveals a home city of LA in the USA, which suggests (though certainly doesn't guarantee) native AmE. FWIW, this answer is "correct" for English too. – Lightness Races in Orbit Apr 3 '17 at 14:57
  • @BoundaryImposition It's correct in the sense that saying "the library is on Pine street" is grammatically fine in English. As far as I can tell it's incorrect in the sense that it claims you can't use "is in Pine street". – DRF Apr 3 '17 at 15:41
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    @DRF: Well, YMMV, but "is in Pine street" sounds very strange to this East Midlander. – Lightness Races in Orbit Apr 3 '17 at 16:07
  • "on the corner" is fairly colloquial. – Kenneth K. Apr 3 '17 at 18:44
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Think of it like this:

  • Located in means inside
  • Located on means at.

Consider the following:

The historic books section is located in the newest branch of the library located on Pine Street.

Here is it clear that the "historic books section" is something that is contained inside the library, which itself is on (not inside) Pine Street.

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To me both in and on sound fine. So I went to check the corpora.

COCA has one case of "in" to roughly 40 of "on" searching for "located in * street" and "located on * street"

Hansard (british parliament) has 7 "in" to 0 "on" with the same search terms.

Scotus (Supreme court of the USA) has 2 "in" and 7 "on" but most are used with definite articles (located in the street or in a street) rather than street names.

Coha (historical american english) has 2 to 16.

Wikpedia (english) has 726 to 3899.

Unfortunately BYU-BNC (british corpus) has no hits for either.

All together and checking a few other resources it seems that "in Pine street" is more idiomatic in BrE whereas AmE seems to be fixed on "on Pine street.

It turns out that there seems to be agreement on ELU aswell See: https://english.stackexchange.com/questions/54251/on-an-american-street-but-in-a-british-one-do-the-twain-ever-meet

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    I wouldn't trust a corpus search in this case. There are more uses for "in the street" and "on the street" than just mentioning addresses, so you weren't necessarily checking what you thought you were. – Karen Apr 3 '17 at 17:41
  • @karen yes there certainly are which is why i did actually check in the cases where the numbers were small. But I was more persuaded by the elu post. There was a ouple other places on the web where I found corroboration but I will check my of CGEL if it has anything to say on the matter. – DRF Apr 3 '17 at 18:05
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For the purpose of standard English language use, the previous answers are incorrect.

The branch is located on Pine Street.

The accepted answer contains the correct answer, but jumps to the wrong conclusion because @max states "the building is considered and enclosed space", but the first example is actually the one that applies.

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