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Output and Pollution Abatement in a U.S. State Emission Function

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  • Neophyta Empora
  • Theofanis P. Mamuneas
  • Thanasis Stengos

Abstract

This study models the relationship between emissions, output and pollution abatement, by defining an emission function in a manner that is consistent with the residual generation mechanism and firms’ optimizing behavior. The relationship is estimated by applying semiparametric estimation and threshold regression on U.S. state-level data from 1973-1994. The results provide a positive nonlinear relationship between emissions and output, rejecting an inverted-U type of relationship between the two (EKC). In the absence of abatement the relationship turns around, verifying the arguments in the literature, that abatement is one of the driving forces for an EKC to emerge.

Suggested Citation

  • Neophyta Empora & Theofanis P. Mamuneas & Thanasis Stengos, 2017. "Output and Pollution Abatement in a U.S. State Emission Function," University of Cyprus Working Papers in Economics 05-2017, University of Cyprus Department of Economics.
  • Handle: RePEc:ucy:cypeua:05-2017
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    Keywords

    Environmental Kuznets Curve; emissions; pollution abatement; residual generation mechanism; semiparametric estimation; threshold regression;

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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