The Trade-off Between Income Inequality and Carbon Dioxide Emissions

Nicole Grunewald, Stephan Klasen, Inmaculada Martínez-Zarzoso and Chris Muris

Ecological Economics, 2017, vol. 142, issue C, 249-256

Abstract: We investigate the theoretically ambiguous link between income inequality and per capita carbon dioxide emissions using a panel data set that is substantially larger (in both regional and temporal coverage) than those used in the existing literature. Using an arguably superior group fixed effects estimator, we find that the relationship between income inequality and per capita emissions depends on the level of income. We show that for low and middle-income economies, higher income inequality is associated with lower carbon emissions while in upper middle-income and high-income economies, higher income inequality increases per capita emissions. The result is robust to the inclusion of plausible transmission variables.

Keywords: Environmental Quality; Income Inequality; Panel Data (search for similar items in EconPapers)
JEL-codes: Q0 Q1 Q3 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (78)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:142:y:2017:i:c:p:249-256

DOI: 10.1016/j.ecolecon.2017.06.034

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