Biological Oxygen Demand and Economic Growth: An Empirical Investigation

Prathibha Joshi and Kris Aaron Beck ()
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Prathibha Joshi: Gordon State College, 419 College Drive, Barnesville, GA 30204, USA
Kris Aaron Beck: Gordon State College, 419 College Drive, Barnesville, GA 30204, USA

Water Economics and Policy (WEP), 2015, vol. 01, issue 02, 1-15

Abstract: Economic development frequently contributes to a decline in water quality; industrial effluents entering the water cause an increase of bacteria that strip the water of its oxygen, often then leading to mass die-offs of other aquatic life. However, the environmental Kuznets curve (EKC) suggests that rising water pollution due to continuing economic growth ultimately stabilizes and then decreases, thus eventually resulting in more oxygenated water that can meet the biological oxygen demand (BOD) required by aquatic life. Yet previous studies have found mixed results for a BOD EKC, with some researchers confirming the inverted U scale of the EKC but others finding different patterns. We therefore re-evaluate the interaction between economic growth and water quality by using a balanced dataset from 1979–1995 and the more dynamic econometric technique of Arellano–Bover/Blundell–Bond generalized methods of moments (GMM) estimator. We compare different samples of OECD and non-OECD countries to determine the likelihood of an EKC. The results show that the OECD countries have an N-shaped curve and that the EKC only emerges with a general sample of non-OECD countries.

Keywords: Environmental Kuznets curve; biological oxygen demand; generalized methods of moments (search for similar items in EconPapers)
Date: 2015
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DOI: 10.1142/S2382624X15500010

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