Interrelationships between Income, Health and the Environment: Extending the Environmental Kuznets Curve Hypothesis
AbstractThis study examines the link between the health indicators and the environmental variables for a cross-section of countries widely dispersed in the economic development spectrum. While the environment and income are seen to have an inverted U-shaped relationship (Environmental Kuznets Curve hypothesis), it is also well established that health and environment are positively related. Our study focuses on the implications of this for the relationship between health and income. In the early phases of income growth, the gains in health and the losses in environmental quality could cancel each other out and this challenges the idea that as incomes increase health would always improve. To empirically analyse these issues, we estimate a two-stage least squares model that focuses on the impact of income and the environment on health status, with environment being an endogenous variable. Our results show that the environmental stress variable has a significant negative effect on health status. At the same time, GNP levels and improvements in access to better sanitation and safe water are shown to vary positively with health status variables. We find that the health gains obtained through improved incomes can be negated to a significant extent if the indirect effect of income acting via the environment is ignored. Research findings in this regard would be a useful policy instrument towards maximising both the environmental and health gains that come with economic growth and development.
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Bibliographic InfoPaper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 740.
Length: 35 pages
Date of creation: 2000
Date of revision:
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Postal: Department of Economics, The University of Melbourne, 5th Floor, Economics and Commerce Building, Victoria, 3010, Australia
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Web page: http://www.economics.unimelb.edu.au
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ENVIRONMENT ; ECONOMETRICS ; ECONOMIC DEVELOPMENT;
Other versions of this item:
- Gangadharan, Lata & Valenzuela, Ma. Rebecca, 2001. "Interrelationships between income, health and the environment: extending the Environmental Kuznets Curve hypothesis," Ecological Economics, Elsevier, vol. 36(3), pages 513-531, March.
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
- C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
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