Between estimates of the environmental Kuznets curve
A recent paper in the Journal of Environmental Economics and Management points out that time effects are not uniquely identified in reduced-form models, such as the environmental Kuznets curve. This Research Report proposes a solution that assumes the time effect is common to each pair of most similar countries. The between estimator makes no a priori assumption about the nature of the time-effects and is likely to provide consistent estimates of long-run relationships in real-world data situations. This research applies several common panel data estimators to the data set for carbon and sulfur emissions in the OECD collected by Vollebergh et al. and the global sulfur dataset compiled by Stern and Common The between estimates of the sulfur-income elasticity are 0.732 in the OECD and 1.157 in the global data set. The estimated carbon-income elasticity is 1.612.
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Working Papers in Ecological Economics
9804, Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program.
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197, Institute for Advanced Studies.
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- Martin Wagner & Georg Müller-Fürstenberger, 2004. "The Carbon Kuznets Curve: A Cloudy Picture Emitted by Bad Econometrics?," Diskussionsschriften dp0418, Universitaet Bern, Departement Volkswirtschaft.
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"A Monte Carlo study of growth regressions,"
Journal of Economic Growth,
Springer, vol. 14(2), pages 103-147, June.
- Peter Egger & Michael Pfaffermayr, 2002. "Long Run and Short Effects in Static Panel Models," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B6-2, International Conferences on Panel Data.
- Jerry Hausman, 2001. "Mismeasured Variables in Econometric Analysis: Problems from the Right and Problems from the Left," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 57-67, Fall.
- Pirotte, Alain, 1999. "Convergence of the static estimation toward the long run effects of dynamic panel data models," Economics Letters, Elsevier, vol. 63(2), pages 151-158, May.
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