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In search of an environmental Kuznets curve in sulphur dioxide concentrations: a Bayesian model averaging approach

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  • BEGUN, JEFFREY
  • EICHER, THEO S.

Abstract

The exact specification and motivation for an environmental Kuznets curve (EKC) is the subject of a vast literature in environmental economics. A remarkably diverse set of econometric approaches and candidate regressors have been proposed, which highlights the degree of model uncertainty surrounding the relationship between environmental quality and pollution. We introduce Bayesian model averaging (BMA) to the EKC analysis to examine: (a) whether a sulphur dioxide EKC exists, and if so (b) which income/pollution specification is supported by the data. BMA addresses model uncertainty as part of the empirical strategy by incorporating the uncertainty about the validity of competing theories into the posterior distribution. We find only weak support for an EKC, which disappears altogether when we address issues relating to the extreme oversampling of two industrialized countries in the sample. In contrast, our results highlight the relative importance of political economy and site-specific variables (specifically executive constraints and precipitation variation) in explaining pollution outcomes. Trade is shown to play an important indirect role, as it moderates the influence of the composition effect on pollution.

Suggested Citation

  • Begun, Jeffrey & Eicher, Theo S., 2008. "In search of an environmental Kuznets curve in sulphur dioxide concentrations: a Bayesian model averaging approach," Environment and Development Economics, Cambridge University Press, vol. 13(06), pages 795-822, December.
  • Handle: RePEc:cup:endeec:v:13:y:2008:i:06:p:795-822_00
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    Cited by:

    1. Hartwell, Christopher A., 2016. "The institutional basis of efficiency in resource-rich countries," Economic Systems, Elsevier, vol. 40(4), pages 519-538.
    2. Thomas Jobert & Fatih Karanfil & Anna Tykhonenko, 2014. "Estimating country-specific environmental Kuznets curves from panel data: a Bayesian shrinkage approach," Applied Economics, Taylor & Francis Journals, vol. 46(13), pages 1449-1464, May.
    3. Dierk Herzer, 2017. "The Long-run Relationship Between Trade and Population Health: Evidence from Five Decades," The World Economy, Wiley Blackwell, vol. 40(2), pages 462-487, February.
    4. Thomas Jobert & Fatih Karanfil, 2012. "Formation and Deformation of the Environmental Kuznets Curve for CO2 Emissions," Chapters,in: Crisis, Innovation and Sustainable Development, chapter 11 Edward Elgar Publishing.
    5. Ernesto Aguayo-Téllez & José Martínez-Navarro, 2013. "Internal and international migration in Mexico: 1995--2000," Applied Economics, Taylor & Francis Journals, vol. 45(13), pages 1647-1661, May.
    6. Pandelis Mitsis, 2012. "Is there an Environmental Kuznets Curve in the Carbon Dioxide Emissions?," University of Cyprus Working Papers in Economics 16-2012, University of Cyprus Department of Economics.

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