Evidence from panel unit root and cointegration tests that the Environmental Kuznets Curve does not exist

Roger Perman and David Stern

Australian Journal of Agricultural and Resource Economics, 2003, vol. 47, issue 3, 325-347

Abstract: The Environmental Kuznets Curve (EKC) hypothesis – an inverted U‐shape relation between various indicators of environmental degradation and income per capita – has become one of the ‘stylised facts’ of environmental and resource economics. This is despite considerable criticism on both theoretical and empirical grounds. Cointegration analysis can be used to test the validity of such stylised facts when the data involved contain stochastic trends. In the present paper, we use cointegration analysis to test the EKC hypothesis using a panel dataset of sulfur emissions and GDP data for 74 countries over a span of 31 years. We find that the data is stochastically trending in the time‐series dimension. Given this, and interpreting the EKC as a long run equilibrium relationship, support for the hypothesis requires that an appropriate model cointegrates and that sulfur emissions are a concave function of income. Individual and panel cointegration tests cast doubt on the general applicability of the hypothesised relationship. Even when we find cointegration, many of the relationships for individual countries are not concave. The results show that the EKC is a problematic concept, at least in the case of sulfur emissions.

Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (275)

Downloads: (external link)
https://doi.org/10.1111/1467-8489.00216

Related works:
Journal Article: Evidence from panel unit root and cointegration tests that the Environmental Kuznets Curve does not exist (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ajarec:v:47:y:2003:i:3:p:325-347

Ordering information: This journal article can be ordered from
http://ordering.onli ... 1111/(ISSN)1467-8489

Access Statistics for this article

Australian Journal of Agricultural and Resource Economics is currently edited by John Rolfe, Lin Crase and John Tisdell

More articles in Australian Journal of Agricultural and Resource Economics from Australian Agricultural and Resource Economics Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().