Income and the pollution path: Update and extensions
Searching for a behavioural explanation of the empirical occurrence of Environmental Kuznets Curve (EKC) the literature has usually assumed additive preferences, i.e. that the marginal utility of consumption does not depend on pollution levels. We update and extend previous literature on the EKC and show that the signing of the slope of the elasticity of substitution between consumption and environmental quality determines the occurrence of the EKC. This novel result does not require imposing restrictions on the sign of the cross-partial derivative of utility with respect to consumption and environmental quality. Under the assumption of a decreasing elasticity of substitution we derive a closed form of the EKC and show that this more general model encompasses as special cases most of the relevant EKC-generating models described in earlier literature.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Beckerman, Wilfred, 1992. "Economic growth and the environment: Whose growth? whose environment?," World Development, Elsevier, vol. 20(4), pages 481-496, April.
- Arrow, Kenneth & Bolin, Bert & Costanza, Robert & Dasgupta, Partha & Folke, Carl & Holling, C. S. & Jansson, Bengt-Owe & Levin, Simon & Maler, Karl-Goran & Perrings, Charles & Pimentel, David, 1995.
"Economic growth, carrying capacity, and the environment,"
Elsevier, vol. 15(2), pages 91-95, November.
- Arrow, Kenneth & Bolin, Bert & Costanza, Robert & Dasgupta, Partha & Folke, Carl & Holling, C.S. & Jansson, Bengt-Owe & Levin, Simon & Mäler, Karl-Göran & Perrings, Charles & Pimentel, David, 1996. "Economic growth, carrying capacity, and the environment," Environment and Development Economics, Cambridge University Press, vol. 1(01), pages 104-110, February.
- Easterlin, Richard A, 2001. "Income and Happiness: Towards an Unified Theory," Economic Journal, Royal Economic Society, vol. 111(473), pages 465-84, July.
- William A. Brock & M. Scott Taylor, 2004.
"The Green Solow Model,"
NBER Working Papers
10557, National Bureau of Economic Research, Inc.
- Dinda, Soumyananda, 2004. "Environmental Kuznets Curve Hypothesis: A Survey," Ecological Economics, Elsevier, vol. 49(4), pages 431-455, August.
- Ahuvia, Aaron, 2008. "If money doesn't make us happy, why do we act as if it does?," Journal of Economic Psychology, Elsevier, vol. 29(4), pages 491-507, August.
- L. Eeckhoudt & C. Gollier & H. Schlesinger, 2005. "Economic and financial decisions under risk," Post-Print hal-00325882, HAL.
When requesting a correction, please mention this item's handle: RePEc:udc:wpaper:wp369. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tatiana Reyes)
If references are entirely missing, you can add them using this form.