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Population, Affluence, and Environmental Impact Across Development: Evidence from Panel Cointegration Modeling

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  • Liddle, Brantley

Abstract

This paper analyzes urban population’s and affluence’s (GDP per capita’s) influence on environmental impact in developed and developing countries by taking as its starting point the STIRPAT framework. In addition to considering environmental impacts particularly influenced by population and affluence (carbon emissions from transport and residential electricity consumption), the paper determines whether and, if so, how those environmental impact relationships vary across development levels by analyzing panels consisting of poor, middle, and rich countries. The development-based panels approach is an improvement on the GDP per capita polynomial model used in the Environmental Kuznets Curve and other literatures for several reasons: (i) it allows one to determine whether the elasticity of all variables considered varies according to development; (ii) it is arguably a more accurate description of the development process; (iii) it avoids potentially spurious regressions involving nonlinear transformations of nonstationary variables (GDP per capita squared); and (iv) unlike the polynomial model, it allows for the possibility that elasticities are significantly different across development levels but still positive—precisely the relationship expected for the environmental impacts considered here. Whether or not the elasticity for affluence was greater than that for population was a function of both the choice of dependent variable and the makeup of the panel (all countries, poor, middle, or rich). Furthermore, the estimated elasticities varied, in a nonlinear fashion, according to the development process: U-shaped, inverted U-shaped, and monotonic patterns were revealed, again, depending on the dependent variable.

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  • Liddle, Brantley, 2013. "Population, Affluence, and Environmental Impact Across Development: Evidence from Panel Cointegration Modeling," MPRA Paper 52088, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:52088
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    13. Hannes Weber & Jennifer Dabbs Sciubba, 2019. "The Effect of Population Growth on the Environment: Evidence from European Regions," European Journal of Population, Springer;European Association for Population Studies, vol. 35(2), pages 379-402, May.
    14. Annageldy Arazmuradov, 2016. "Economic prospect on carbon emissions in Commonwealth of Independent States," Economic Change and Restructuring, Springer, vol. 49(4), pages 395-427, November.
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    20. Mohammad Mahfuzur Rahman & Kanij Jahan Bindu & Md. Kamrul Islam, 2018. "Linking Per Capita GDP to Energy Consumption, Ecological Footprint, and Carbon Dioxide Emission in a Developing Economy in the World: The Case of Bangladesh," Journal of Banking and Financial Dynamics, Sophia, vol. 2(1), pages 9-15.
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    22. Andrew Jorgenson & Daniel Auerbach & Brett Clark, 2014. "The (De-) carbonization of urbanization, 1960–2010," Climatic Change, Springer, vol. 127(3), pages 561-575, December.
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    More about this item

    Keywords

    STIRPAT; population and environment; FMOLS panel cointegration; environment and development; IPAT; GHG emissions; Environmental/Carbon Kuznets Curve;
    All these keywords.

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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