The income-pollution relationship and the role of income distribution: An analysis of Swedish household data
AbstractThe main purpose of this study is to analyze the relationship between pollution and income at household level. The study is motivated by the recent literature emphasizing the importance of income distribution for the aggregate relation between pollution and income. The main findings from previous studies are that if the individual pollution-income relationship is non-linear, then aggregate pollution for, say, a whole country, will depend not only on average income, but also on how income is distributed. To achieve our objective we formulate a model for determining the choice of consumption of goods in different types of household. Furthermore we link the demand model to emission functions for various goods. The theoretical analysis shows that without imposing very restrictive assumptions on preferences and the emission functions, it is not possible to determine a priori the slope or the curvature of the pollution-income relation. The empirical analysis shows that, given the model used, the pollution-income relation has a positive slope in Sweden and is strictly concave for all three pollutants under study (CO2, SO2, NOx), at least in the neighbourhood of the observed income for an average household. We also show that altering the prevailing income distribution, holding average income constant, will affect aggregate emissions in the sense that an equalization of incomes will give rise to an increase in emissions. One implication is then that the development of aggregate pollution due to growth depends not only on the income level, but also on how growth is distributed.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Resource and Energy Economics.
Volume (Year): 30 (2008)
Issue (Month): 3 (August)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505569
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stern , David I., 1998. "Progress on the environmental Kuznets curve?," Environment and Development Economics, Cambridge University Press, vol. 3(02), pages 173-196, May.
- James Boyce, 1994. "Inequality as a Cause of Environmental Degradation," Published Studies ps1, Political Economy Research Institute, University of Massachusetts at Amherst.
- Brannlund, Runar & Nordstrom, Jonas, 2004.
"Carbon tax simulations using a household demand model,"
European Economic Review,
Elsevier, vol. 48(1), pages 211-233, February.
- Brännlund, Runar & Nordström, Jonas, 1999. "Carbon Tax Simulations Using a Household Demand Model," UmeÃ¥ Economic Studies 508, Umeå University, Department of Economics.
- Grossman, Gene M & Krueger, Alan B, 1995.
"Economic Growth and the Environment,"
The Quarterly Journal of Economics,
MIT Press, vol. 110(2), pages 353-77, May.
- Ravallion, Martin & Heil, Mark & Jalan, Jyotsna, 2000. "Carbon Emissions and Income Inequality," Oxford Economic Papers, Oxford University Press, vol. 52(4), pages 651-69, October.
- Heerink, Nico & Mulatu, Abay & Bulte, Erwin, 2001. "Income inequality and the environment: aggregation bias in environmental Kuznets curves," Ecological Economics, Elsevier, vol. 38(3), pages 359-367, September.
- Theodore Panayotou, 2000. "Economic Growth and the Environment," CID Working Papers 56, Center for International Development at Harvard University.
- McDonald, James B, 1984. "Some Generalized Functions for the Size Distribution of Income," Econometrica, Econometric Society, vol. 52(3), pages 647-63, May.
- Boyce, James K., 1994. "Inequality as a cause of environmental degradation," Ecological Economics, Elsevier, vol. 11(3), pages 169-178, December.
- Gene M. Grossman & Alan B. Krueger, 1991.
"Environmental Impacts of a North American Free Trade Agreement,"
NBER Working Papers
3914, National Bureau of Economic Research, Inc.
- Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
- Grossman, Gene & Krueger, Alan B, 1992. "Environmental Impacts of a North American Free Trade Agreement," CEPR Discussion Papers 644, C.E.P.R. Discussion Papers.
- James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
- Ghalwash, Tarek, 2006. "Demand for Environmental Quality: An Empirical Analysis of Consumer Behavior in Sweden," UmeÃ¥ Economic Studies 676, Umeå University, Department of Economics.
- Andreoni, James & Levinson, Arik, 2001.
"The simple analytics of the environmental Kuznets curve,"
Journal of Public Economics,
Elsevier, vol. 80(2), pages 269-286, May.
- James Andreoni & Arik Levinson, 1998. "The Simple Analytics of the Environmental Kuznets Curve," NBER Working Papers 6739, National Bureau of Economic Research, Inc.
- Scruggs, Lyle A., 1998. "Political and economic inequality and the environment," Ecological Economics, Elsevier, vol. 26(3), pages 259-275, September.
- Bimonte, Salvatore, 2002. "Information access, income distribution, and the Environmental Kuznets Curve," Ecological Economics, Elsevier, vol. 41(1), pages 145-156, April.
- Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
- McCONNELL, KENNETH E., 1997. "Income and the demand for environmental quality," Environment and Development Economics, Cambridge University Press, vol. 2(04), pages 383-399, November.
- Selden Thomas M. & Song Daqing, 1995. "Neoclassical Growth, the J Curve for Abatement, and the Inverted U Curve for Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 162-168, September.
- Lopez Ramon, 1994. "The Environment as a Factor of Production: The Effects of Economic Growth and Trade Liberalization," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 163-184, September.
- Torras, Mariano & Boyce, James K., 1998. "Income, inequality, and pollution: a reassessment of the environmental Kuznets Curve," Ecological Economics, Elsevier, vol. 25(2), pages 147-160, May.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.