| By: |
Carlos A. Flores (Department of Economics, University of Miami);
Alfonso Flores-Lagunes (Food and Resource Economics Department, University of Florida and IZA, Bonn, Germany);
Dimitrios Kapetanakis (Food and Resource Economics Department, Universty of Florida) |
| Abstract: |
The environmental Kuznets curve (EKC) hypothesizes that the income-pollution
rela- tionship has an inverted U shape: pollution increases with income up to
a turning point beyond which it decreases. The empirical literature has
concentrated on estimation of this relationship at the mean employing
longitudinal data, with the typical ?nding supporting the inverted U shape.
Conditional mean estimation, however, can mask heterogeneities present at
higher and/or lower quantiles of the emissions?distribution, in addition to
being more sensitive to the presence of outliers. We apply methods for
conditional-quantile panel ?xed e¤ects models to the estimation of the
income-pollution relationship on U.S. state-level data on NOx (nitrogen oxide)
and SO2 (sulfur dioxide) pollutants over the period 1929- 1994. Our results
indicate that conditional mean methods provide too optimistic estimates about
emissions reduction of NOx, as conditional-quantile methods suggest that the
turning point of the relationship occurs at higher values of income; while the
opposite is found for SO2. Another important lesson drawn is that the
income-pollution relationship is sensitive to the presence of outliers in the
data. |
| Keywords: |
Environmental Kuznets Curve, Panel Quantile Estimation, Income and the Environment |
| JEL: |
Q56 C21 C23 |
| Date: |
2009–08 |
| URL: |
http://d.repec.org/n?u=RePEc:mia:wpaper:2010-4&r=res |