As it turns out, the developers of the Lavender Town area had sought to make an area that would leave an impression on the player, according to Seki Uchitada, who was a member of the development team. Seki claimed that at the time of development, a number of the team were interested in making Lavender Town a little different to the rest of the game.
The Pokmon Tower is a visible result of that, Seki told Games Dimensions Magazine) in an interview earlier this year. That, and the fact that Lavender Town is so different from all the other cities in the game: it is smaller, it has fewer people occupying it, it didnt have a gym and, of course, the music was very, very eerie. In fact, in the first version of the game, we were told to slightly change the song played in the background of Lavender Town because our manager told us it would make children upset. The music used in subsequent versions is different.
Either Seki was unaware of the full impact of the Lavender Town Tone, or was vastly underexaggerating how upset children would get no more is said of the music in the article, but there are mentions of Lavender Towns other macabre features (see below).

What Seki failed to disclose to Games Dimensions Magazine was that the music used in the first-wave release of Pocket Monsters Red and Green was formulated out of an experiment in binaural beats: using slightly different frequencies of sound, each frequency played in one ear through earphones or headphones, various psychological effects can be induced upon the listener. In most versions of the first wave releases, this resulted in the player feeling uneasy, apprehensive, and mildly disturbed. However, for upwards of two-hundred children, it provoked a variety of disturbances in the brain that went undetected purely because it was undetectable by fully developed human ears instead, only children fell victim to the tones , resulting in psychological and physiological problems that in some cases led to death many of which were suicides.